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Tax time is open season for fraudsters

As if tax season weren’t irksome enough.

Scammers are once again exploiting confusion and misinformation about tax filing protocol to hijack money and identities from unwary taxpayers, local law enforcement officials warn.

The IRS began accepting electronic returns Jan. 23. The following week, the Los Altos Police Department and the Santa Clara County Sheriff’s Office published online alerts in conjunction with Tax Identity Theft Awareness Week. The Mountain View Police Department will launch its own awareness campaign in March.

“This is a big issue, and a lot of people are going to get these weird calls, these weird emails, so keep your wits about you,” said Katie Nelson, Mountain View Police Department spokeswoman.

The U.S. Treasury Inspector General for Tax Administration, an independent IRS oversight group, considers IRS telephone impersonation scams a “serious threat” to the American public. Between October 2013 and Sept. 30, 2016, the organization logged more than 1.8 million instances in which taxpayers reported contact from suspected IRS impersonators. More than 9,000 victims reported losing money due to the encounters, resulting in a combined total loss of more than $49 million. Inspector General reports from October 2013 to Nov. 1, 2016, indicate that California ranked No. 1 among states with the most losses (more than $10 million), followed by New York (more than $4 million), Texas (more than $4 million), Illinois (more than $3 million) and Florida (more than $2 million).

Modus operandi

A typical tax season scam involves an unsolicited phone call, voicemail or text message from an individual impersonating an IRS or U.S. Treasury employee. The scammer tells the victim he or she owes back taxes or other fees and demands payment via prepaid debit card, money order, bank wire transfer or iTunes gift card.

“IRS agents will never require payment directly to the agent,” wrote Scott McCrossin, Los Altos Police Department captain, in a crime alert posted online last week. “Additionally, the IRS will first contact you by mail and will not require a specific type of payment.”

Scammers attempt to keep their targets on the phone for as long as possible to glean as much information as possible, Nelson said. Their requests for information or payment are often characterized by urgency, aggression and even threat of fine or incarceration.

“Any phone call that’s threatening in any way, or if you feel uncomfortable – don’t talk to them,” she said.

And don’t be duped by callers able to supply your name or address, as such information is readily available online, Nelson said. Some online services, like White- pages.com, publish ages and age ranges for people associated with particular addresses and phone numbers; scammers have been known to use this information to target the elderly.

“Your phone number is everywhere, and the ability to connect it back to you doesn’t take that much (effort),” Nelson said.

The IRS warns against caller ID spoofing, a method for masking or manipulating the phone number, business name and/or agency name displayed during incoming calls.

Phishing expedition

The web-based version of the tax season impersonation scam is a “phishing” email designed to appear as if it originated from the IRS. These emails often direct recipients to websites mirroring the official IRS website, IRS.gov, where they are prompted to provide or update sensitive personal identification information like Social Security numbers. Sometimes these bogus websites infect taxpayers’ computers with malware, software that can collect sensitive information or perform malicious and harmful tasks.

The 2016 tax season marked an approximately 400 percent surge in phishing and malware incidents, according to the IRS.

Other tax-related crimes involve using stolen identity information to obtain refunds, masquerading as a tax preparer to target tax filers, masquerading as a tax filer to target tax preparers and harvesting Identity Protection Personal Information Numbers created by the IRS so that identity theft victims may verify tax information.

Don’t wait

This year, Americans have until April 18 to submit tax returns because the traditional filing date, April 15, falls on a Saturday, and the following Monday, April 17, is Emancipation Day, a federal holiday in Washington, D.C. But that’s not an invitation to procrastinate.

A taxpayer who files early reduces the likelihood a fraudster, supplied with stolen identification information, files before them and claims the tax refund, according to the IRS.

The IRS encourages victims of tax-related fraud to contact local law enforcement promptly, file complaints with the Federal Trade Commission via identitytheft.gov, place fraud alerts on credit records through services such as Equifax or Experian, and notify financial institutions.

For more information on tax-related fraud, visit irs.gov/uac/taxpayer-guide-to-identity-theft.

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