June 16, 2024

Specialists from LifeLock suggest ways to safeguard your identity and refund when employing professionals to manage your tax returns

TEMPE, Ariz. and PRAGUE, March 14, 2024 /PRNewswire/ — With the persistent occurrence of the tax season, a distressing number of Americans seeking assistance in filing their tax returns are expressing concerns regarding fraudulent tax preparation services. A recent consumer study conducted by LifeLock, a renowned brand offering identity protection under Gen™ (NASDAQ: GEN), reveals that sixty-one percent of Americans are fearful of falling prey to prevalent tax scams that might lead to identity theft, financial loss and could also land them in hot water with the IRS. Their concerns are not unwarranted as tax-related scams cost American taxpayers $5.7B in 2022.

Secure your identity and refund this tax season by preventing tax preparation scams.

Secure your identity and refund this tax season by preventing tax preparation scams.

Fraudsters deceive taxpayers by portraying themselves as legitimate tax preparation service providers through emails, ads on social media and text messages. Their primary objective is to extract sensitive personal and financial information. With over half of Americans opting to subcontract tax preparation and another 40 percent utilizing software to handle filings themselves, it’s crucial to identify if the service is authentic.

“Scammers understand that most individuals are baffled and overwhelmed by the tax filing procedure and prefer to leave the task to an expert to ensure they receive the maximum refund or smallest penalty,” stated Ian Bednowitz, General Manager of Identity for LifeLock. “There is a general belief that availing the services of a tax professional or a software service can be costly. Hence, individuals look for alternative options, which can end up being significantly more expensive if they land on a counterfeit site or hand over their tax documents to a scammer.”

Warning Signs of Ghost Preparation Service Scams

As per the IRS, 80 million people filed returns prepared by a CPA. However, not all individuals offering tax advice or preparation services are trustworthy. Anyone paid to prepare someone else’s taxes must possess a Preparer Tax Identification Number (PTIN) and is expected to sign the completed returns. Refusal to sign a return is a big red flag that the individual preparing the taxes is attempting to “ghost” people and run off with their fees, their refunds or even their identities.

These culprits usually entice individuals with the guarantee of substantial refunds and charge fees based on a percentage of the anticipated refund, payable by cash only. They often motivate clients to resort to shortcuts to maximize their refunds or have them sign incomplete returns, which they promise to fill out later. Subsequently, they refuse to provide victims with copies of their returns and vanish without leaving any traces.

Specialists at LifeLock strongly recommend everyone to verify the qualifications of the tax preparer using the IRS directory to find tax professionals with credentials recognized by the IRS. Always review all returns before submission and never sign an empty form.

Fraudulent Tax Prep Websites

Scammers target individuals with malicious links to counterfeit sites and malware through social ads, emails and text messages that impersonate the IRS and popular online tax prep software companies like TurboTax and H&R Block. Their aim is to trick people into clicking these links to resolve return issues or to avail of new services. Scammers then install malware to record login credentials and access the information linked to profiles and tax forms to steal your identity.

Experts advise always scrutinizing the content of emails and the sender’s address diligently for anything suspicious, like misspelled words, alarming or urgent language, or URLs that display “http” instead of “https”. Never interact with links if you have suspicions. Instead, delete the message and block the sender. Norton Genie is an AI-powered scam detection app that can assist individuals in analyzing suspicious emails and texts and provide guidance.

Scams Targeting Tax Professionals

The IRS has alerted legitimate tax professionals, accountants and agents to be vigilant for phishing attacks that aim at their businesses and might trick them into clicking on harmful links and gaining unauthorized access to the tax preparer’s computer systems and databases.

These perpetrators frequently use emails impersonating potential new clients, filing platforms or even the IRS to insert links or malicious attachments loaded with malware. Attacks are often designed to collect customer data and steal the tax preparer’s identity, making it possible for them to file fraudulent returns using their name and credentials.

Experts advise tax professionals to prioritize cybersecurity throughout the year, not just during the tax season. Never click on suspicious links or open attachments from addresses you do not recognize. Report phishing attempts to the IRS by forwarding the email to [email protected]. Solutions like Norton Small Business can equip independent firms with tools to identify and ward off cyberattacks.

Steps to Take Upon Becoming a Victim