Here’s what you need to know to keep you and your church safe!

Unfortunately, we live in a world where there are many scams and technology has increased the ways in which we can come in contact with them. And we’re all potential targets – from churches to businesses to individuals.

Now that W-2s are arriving, it’s time to consider how to stay safe from tax scams. Every year, unfortunate taxpayers go to file their returns and are shocked to find that someone else has filed a fraudulent return in their name!

“Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use the regular mail, telephone, or email to set up individuals, businesses, payroll and tax professionals.” This is a direct quote from the IRS Tax Scams/Consumer Alerts website.

Just how prevalent are these scams? In 2018, the Federal Trade Commission reported that imposter scams topped its list of consumer complaints. Nearly $488 million was reported lost and nearly 1 in 5 people lost money from these.

Interestingly, people aged 20-28 reported losing money more often in these types of attacks than any other age group. However, people aged 70 and above, had a much higher median loss. This illustrates an important point: We are all potential targets of this type of fraud. Realizing this is an important step to staying safe.

While the tactics and subject that scammers use can vary, here are some common variants:

1) “We need your Social Security number” – In this scam, you receive a phone call from someone claiming to be with the IRS. The person tells you that you haven’t paid your taxes. Or you may receive an email that looks like a bill for unpaid taxes. In both cases, the email asks for your Social Security number (SSN) and a bank account number to confirm your identity.

If you hand over your SSN, scammers will use it along with the other information you provided in order to steal any refund you may be due.

Please protect your social security number!

2) “You’re under arrest!” – In this scam, you receive a phone call from someone posing as an IRS official or law enforcement agency. The person tells you that you have unpaid tax bills and threatens you with arrest unless you pay immediately.

They tell you to pay with your debit card, gift card, or by wire transfer. The caller may even make their caller ID information on your phone appear to look like it’s from the IRS. Once you make the payment, your money is gone as there is no way to recover it. (Which is exactly why they demand those methods of payment and not a credit card.)

3) Phishing and Malware Schemes – These types of scams often lead to falsely filed tax returns and identity theft, but may also result in downloading malware of viruses. This happens when criminals send phishing emails directing you to fake websites that appear to be the IRS, tax software vendors, state government, or financial institution websites. Their goal is to trick you into entering your login credentials, verifying or providing sensitive info, or installing malware or a virus.

How do you stay safe?

Be skeptical – Be wary of any contact by phone, text, social media, or email claiming to be from the IRS, as they do not contact taxpayers directly for this type of information.

File early – That way, if scammers do steal your SSN, they won’t be able to use it to file a fake tax return as you’ll have already filed your return.

Keep your computer patched and run updated antivirus software – These are basic computer security requirements that everyone should follow.

Protect your personal information – Value your Social Security number, bank account info, and passwords and don’t just give it out to anyone who asks for it. If you must provide your important data online, verify that you’re on a legitimate site and not a phished one made to look like the real thing.

Use “2-Factor Authentication” wherever possible – 2-factor authentication uses something you know (a password) and something you have (usually a code texted to your cell phone) to authenticate you. That way, if your password to a banking site is ever compromised, the attacker would still need the code that gets texted to your phone to gain access. While nothing is 100% secure, this definitely increases your security. Many banking sites, and sites like Amazon and Ebay have implemented forms of 2-factor authentication.

Practice good phishing prevention – I’ve covered this in past articles, but:

  • Never click on email links; type the organization’s website into your web browser.
  • If you feel something is suspicious, contact the organization through a known method, like their publicly-posted customer service line.
  • Do not reply to emails or texts asking for personal or tax information.
  • Pay attention to website URL’s and sender addresses. Malicious sites may look identical to a legitimate site, but the URL may use a variation in spelling or a different domain.

Realize that the IRS will NEVER:

  • Ask for credit or debit card numbers (or even gift cards as payments!) over the phone.
  • Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card, or wire transfer.
  • Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
  • Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.

What to do if you are a victim:

If you suspect that you have been a victim of fraud or identity theft, please head to www.identitytheft.gov, run by the Federal Trade Commission. It provides a step-by-step recovery plan and assistance in taking action. It also allows you to report if someone filed a return fraudulently in your name or if your information was exposed in a major data breach.

If you believe someone has used your Social Security number to fraudulently submit a tax return, you can also call the IRS at (800) 908-4490.

Keep these common types of fraud in mind, and don’t hesitate to seek assistance if you become a victim.