Is it just me or does it feel like tax time was not that long ago? The taxing season is upon us again and one group of citizens is just giddy with excitement. No, not tax preparers. For identity thieves, tax time is one of the best and busiest times of the year as they prey on unsuspecting taxpayers caught in a whirlwind of returns, refunds and rebates.

So why is tax time so good for identity thieves? Three simple reasons:

1. A lot of money will be on the move as millions of consumers send and receive billions of dollars in tax payments over a very condensed period of time. According to the Internal Revenue Service (IRS),   during last year’s filing season more than 130 million taxpayers received refunds totaling nearly $300 billion. That doesn’t include the checks that taxpayers sent out to the IRS.
2. Tax time involves the distribution of a lot of documents, laws, and communications – the ideal time to trick a busy taxpayer. And of course many of these documents contain the taxpayer’s crown jewels – name, address, spouse, employer, Social Security number, bank account number and much more.
3. The letters I- R- S already scare most people, and the thieves’ bank on that emotion to prey on their unsuspecting victims.  (Your computer has been infected, your bank account has been suspended – any of these sound familiar?)

Tax time scams are nothing new, and the scams this year will probably be a rehash of previous years. But what you really need to watch out for are more clever variations that are more likely to catch you off guard.

Most of the scams you’ll most likely encounter this year will come in an email or phone message, although you shouldn’t rule out the possibility of a snail mail scam (mail received in your mailbox).

Here’s a selection of the kinds of tricks the scammers will use.  Most of these scams are likely to come as official looking IRS communications that will prey on fear, urgency or greed:

• Someone else has submitted a tax return using your Social Security number and in order to fix the problem you’ll have to confirm your Social Security number (or submit an online dispute or claim form that includes your SSN).

• The IRS can expedite your refund if you submit your bank account and routing information.

• If you don’t accept direct deposit of your refund directly into your bank account, you’ll face a fee or penalty.

• The IRS has your stimulus check or rebate and would like to deposit it in to your account. This can be a very effective trick because there are so many stimulus programs or discussions going on (like the new “cash for caulking” rebate program).

• The IRS would like you to participate in a taxpayer satisfaction survey which will eventually either ask you for personal information, or the link in the email will lead to a malicious download.

• The IRS now offers a generous installment payment plan if you owe taxes, and you can begin by submitting your bank account information.

• You’re being audited and you must respond within 24 hours using an online form.

• The IRS already sent you a check but it has not been cashed, and you’ll need to confirm your bank account information or Social Security number in order to have the check resent.

Consumers are not the only target. Businesses can expect to receive fake IRS emails containing attachments purporting to be changes in tax laws, a tax problem with a specific employee, or threat of an audit.

The attachment or link is likely to contain a Trojan or other malware that could easily empty the victim’s bank account, and the FBI estimates that more than 200 businesses lost more than $40 million through this scam last year.

These can be very effective because businesses expect to receive this kind of correspondence, although they shouldn’t expect them by email.

And don’t just watch for IRS scams. There are numerous scams in circulation focusing on property tax appraisals, so keep an eye out from scam emails and even letters purporting to be from your local county tax assessor.

So what should you do to avoid being scammed:

• The Golden Rule! Always ignore every email or phone call you receive either from the IRS or local tax assessors. They will never email or call you – they always write.

• Always protect your computer.    Be sure to update anti-virus, anti-spyware, and firewall protection and protect your passwords.

• If you do receive a letter about your taxes, especially one that demands payments you’re not expecting, contact the IRS directly through their web site at www.irs.gov and use any case numbers included in the correspondence you received. They’ll be able to confirm its legitimacy.

• If you receive any emails at work purporting to be new tax laws or threats of an audit, again go directly to the IRS web site and contact them from there. Don’t open any attachments or click on any links.

If you plan to make tax payments by check, make the check out to the Internal Revenue Service and not the IRS, because anyone who steals the check could easily change the letters and deposit the check.

Related posts:

1. The IDGuardian Podcast: Episode #006 — Protecting Your Identity While Traveling
2. Why Black Friday Could Be a Red Carpet for Scammers
3. Identity Safety for Your Teens
4. Identity Safety for Your Child
5. The IDGuardian Podcast: Episode #004 — Why Black Friday Could Be a Red Carpet for Scammers