One of the top reasons people file their taxes early is so they can get their refund more quickly, but this year taxpayers may need to have a bit more patience than usual. There is a good reason for that: the Internal Revenue Service is taking a closer look at early returns in order to fight tax fraud, according to a report from Susan Ladika at CreditCards.com, a BBB Accredited Business.
Stepped-up security measures have already put a dent in identity theft when filing taxes. The number of identity theft tax fraud cases plunged by 50 percent during the first nine months of 2016, compared to the year before, the IRS says. In 2015, more than 512,000 identity theft cases were reported. In 2016, there were 238,000 cases.
The dollar amount of suspected fraudulent refunds also was slashed – from $829 million in 2015 to $239 million in 2016.
Despite the successes in fighting tax fraud, the IRS issued a warning in late January about a W-2 phishing scam in which cybercriminals send an email in the name of a corporation’s officer. The goal: to trick human resources and payroll officials into releasing employee W-2 forms, or disclosing employee names, Social Security numbers and income information. Fraudsters then file fake tax returns with the information, take the refunds and run.
Tax scams are plentiful, and were the top reported scam to BBB Scam Tracker in 2016, even after a raid on a call center in Mumbai, India, cut the number of reports by 90%.
The IRS recently issued an alert about a W-2 phishing scam, which has spread from businesses to nonprofits and schools. Phishing leads the IRS’s “Dirty Dozen” list of tax scams to watch out for in 2017. Also on the list: fraudulent emails and texts that look like they are from the IRS, malware, identity theft, and fake tax returns.
The Canada Revenue Agency warns of similar scams in that country, and has posted tips and warnings about the most common scams aimed at taxpayers.
So, be patient while waiting for your tax refund. And learn more about avoiding scams with BBB’s “Ten Steps to Avoid Scams” (bbb.org/avoidscams).
Read the entire report on CreditCards.com