How to Protect your Personal and Financial Data this Tax Season
This tax season, your personal and financial data is at risk of getting breached or compromised more than ever as more tax fraudsters are in the lookout for vulnerable taxpayers. And at this point, the best weapon that you can use against acts of fraud is knowledge. This is the reason why it is important to know the basics of how the IRS operates and the precautions you can do to keep the opportunist fraudsters at bay.
In this article, you will find a curation of the tips from thought leaders that will teach you the most effective ways to protect your personal & financial data, so you can avoid becoming a victim of tax fraud this season.
Understand How the IRS Operates
The Internal Revenue Service is a staunch player in advancing tax fraud awareness. It warns taxpayers, “Remember — if it sounds too good to be true, it probably is.” It has been compiling common tax scams that victimize thousands of taxpayers yearly. They call it the Dirty Dozen, some of which that involve stealing your financial and personal data include:
- Fraudulent Phone Call where someone poses as an IRS personnel tricking the taxpayers over the phone into sharing their personal and financial information.
- Email Phishing Schemes. Scammers and fraudsters leverage the benefits of emailing to trick taxpayers. There are a variety of email phishing schemes:
- An email pretending to be from the IRS asks taxpayers to update personal and financial data through a link that leads to a fake form or a link that may be infected with malware.
- Scammers pretend to be a personnel from Taxpayer Advocacy Panel (TAP) informing the taxpayer about tax refund and asking them for tax information which the fraudsters will use for identity theft.
- Another scheme targets the Human Resources professionals or payroll officer by posing as the company’s CEO and defrauding the HR or payroll officer into divulging the personal and financial information of the employees. Snapchat HR fell for this.
- Tax Return Preparer Fraud. In this scam, a bogus tax preparer tricks a taxpayer into using his bank account to transfer tax refunds claiming that it is safer and faster. Others use the access to tax information in order to engage in identity theft and claim tax refunds.
If you encounter any of this schemes remember that…
- The IRS does NOT officially communicate through email;
- The IRS does NOT call about tax refund or taxes owed without first sending you several bills by mail with specific instruction.
- The IRS does NOT call or email you to ask for an update on your personal & financial information or verify your identity.
- The IRS does NOT ask about bank account information over the phone or email.
Choose a Professional Tax Preparer Wisely
If you need professional help to prepare your tax return, the IRS reminds you to choose your tax return preparer wisely. Your tax preparer will have full knowledge about your tax information including your SSN, income, qualifying refunds etc. Hence, it is important to observe extra precaution.
By far the most effective way to prevent falling into fraudulent preparer is to check the preparer’s qualifications. Only hire those who have PTIN and professional credentials to prepare your tax return. The IRS has a directory tool to help you find qualified and trusted preparers. You can also ask the Better Business Bureau about the background of the preparer.
Use Encryption when Emailing
While the IRS will not reach out to you through email, chances are you will need to send some confidential information via email, for instance for the tax preparer. To keep your personal and financial data safe, David Wagner a veteran in IT security told Business News Daily that it is important to use encryption when sending confidential information over email. This is especially helpful for small business owners preparing W-2 forms.
Email phishing are ubiquitous and email hacks are a common problem of many people. That’s why it is important to keep your email transaction encrypted and your email account secured which leads us to the next item.
Practice Good Password Hygiene
Practicing a good password hygiene is a basic requirement to ensure security in the online world. Your email and online accounts such as that in electronic filing tools should be encrypted with strong password. A common misstep is using the same password in multiple accounts. Do not put all the eggs in one basket: when stolen, the hacker can access all your data and steal as many confidential information as possible from your various online accounts. Another misstep to avoid is using hackable passwords e.g birth dates, name, “123456” “password” and the likes.
A good practice is to use password generator for each account and store them in a password manager. With this, you only have to remember one password while ensuring strong encryption for your online accounts.
Secure Your Network Connection
One of the reasons why hackers are able to extract confidential data from users is through unsecured network. An unsecured network has a hole where hackers can creep into your account and get your personal and financial information.
Safe practices must be ensured to avoid this. Make sure that you are using a secured network. It is also important to avoid connecting to a public wifi when accessing your email, online bank account or efiling account. At home, only join password protected network or VPN instead of public wifi.
About the Author, Micah de Jesus
Micah de Jesus is a Digital Marketing Professional and a data / cybersecurity news junkie. She works as the Managing Director of GrowthScout SEO Services, a digital marketing firm and a Contributing Editor for INOC – Network Operation Center, The Partnership UK and Solus Multi Factor Authentication.