Tax season is here. File early to try to beat the tax refund thieves

Tax filing season starts Jan. 31
Tax filing season starts Jan. 23.

Tax season is here, and as you gather and receive information to prepare to file, the Florida Office of Financial Regulation warns that scammers are ramping up as well.

To avoid becoming a victim of criminals who file fraudulent tax returns using stolen identities, remain vigilant and file as early as possible, the OFR advises.

The IRS will begin accepting returns Jan. 23, and individual returns are due by April 18.

Many thieves see tax refunds as an easy target because they only require a name, Social Security Number and date of birth to file. Anyone who holds a Social Security Number may be at risk. Still, there are some simple, effective steps to reduce your risk of becoming a victim.

Here’s the OFR’s advice on how to reduce your risk:

  • Filing your taxes early in the season. Fraudsters typically file false returns as early as possible so that the IRS receives the false return before the legitimate one. Your risk for identity theft drastically decreases when you collect and file your information early.
  • Using a secure internet connection, if you file your taxes online. Also use an electronic device that you trust.
  • Taking your tax return directly to the post office if you plan to send it through the mail. Leaving your return in your mailbox can be risky and make you more vulnerable to identity thieves.
  • Doing your research before handing over your personal information to a tax preparer. Make certain that you are using someone credible and trustworthy.
  • Being wary of IRS phone and email scams. The IRS will never contact you by phone or email if they need information. Never provide personal information over the phone to a so called “IRS agent.”

Tax scams capture top fraud spot once again in 2016, BBB says

Tax-related scams the the most prevalent scam of 2016.
Tax-related scams are the most prevalent scam of 2016.

The top three scams of 2016 — tax scams, debt collection scams and sweepstakes /prizes/gift scams, were the same as in 2015, the Better Business Bureau of Southeast Florida and the Caribbean said Wednesday.

The Internal Revenue Service has said that rampant identity theft by criminals who file fraudulent returns using someone else’s Social Security number is the nation’s biggest tax-related scam.

The IRS estimates it will lose $26 billion due to fraudulent refunds from 2012 through this year.

Florida has been a hotbed for identity theft that exploits the way the IRS doles out tax refunds.

Most victims find out when they file their tax returns electronically and it bounces back because someone has already filed a return using their identity.

For tips on how to prevent it, click here.

Based on more than 30,000 reports consumers submitted on bbb.org/scamtracker, the other top seven scams for 2016  are online purchase, employment, government grant, tech support, advance fee loan, fake check/money order and phishing.

 

 

 

IRS imposter scam reports to BBB drop, but could easily surge again

Call centers in India where a tax scam was based was shut down, but such centers often re-open in a new location.
Call centers in India where a tax scam was based was shut down, but such centers often re-open in a new location.

Reports to the Better Business Bureau from victims of the “IRS tax scam”  have dropped dramatically since police raided nine call centers in Mumbai, India earlier last month, the BBB said Monday.

The scam involves robo callers or actual people who call victims and pretend they are with the IRS. They threaten their targets with financial penalties, lawsuits, and even arrest if they don’t pay the back taxes they supposedly owe.

Listen to IRS imposter scam robocall that threatens a lawsuit

The tax scam has accounted for about one in four reports to BBB’s Scam Tracker in its first year of operation. But since the raid, there has been a 95 percent decline in new reports. In a typical week, BBB Scam Trackers receives approximately 200 reports on tax scams. Now it’s about 11 a week.

Of the 770 employees working at the Mumbai call center when the midnight raid was conducted, 70 people were charged with fraud and other crimes, according to news reports, and the rest are under investigation.

Emma Fletcher, manager of BBB Scam Tracker warns that scammers are opportunists.

“Hopefully, this crew won’t be stealing from anyone again for a long while. But we will be keeping an eye on incoming scam reports so we can alert consumes what the ‘next big thing’ in scams turns out to be,” Fletcher said.

Often, scammers who are shut down re-open in another location under a different name.

Police in India said the callers were trained to speak with an American accent. The call centers were bringing in $150,000 a day over the last year. The victims’ would transfer their money to U.S. bank accounts before it was sent to India.

Law enforcement officials in India reported that the call center owners escaped, and that that they were believed to be working with accomplices in the U.S.

 

 

 

What’s the fastest growing consumer complaint?

Complaints about phony IRS agents and other imposter scams, tax ID theft and energy services were the top three fastest-growing complaints last year, according to a report released Wednesday.

When you answer the phone, how can you be sure the caller is telling you who they really are? (Getty Images)
When you answer the phone, how can you be sure the caller is telling you who they really are? (Getty Images)

Susan Grant, director of consumer protection and privacy at the Consumer Federation of America, said, “Scammers are always changing their pitches and looking for things that work. The IRS phony agent obviously works. It scares the heck out of people.”

The Consumer Federation of America and the North American Consumer Protection Investigators report is based on input from 33 consumer agencies from 21 states, including the Florida Department of Agriculture and Consumer Services.

To read the full report, which provides additional suggestions for new laws as well as descriptions of agencies’ biggest achievements and challenges and tips for how consumers can protect themselves, click here.

Grant said imposter scams of all kinds have really taken off in the last year. She theorizes that a lot of people are behind on paying their taxes and don’t realize that the IRS does not call people asking them to send money.

“There is an alarming trend. It has gotten to the point that if someone is saying they are from a government agency, or your utility, or it’s your boss, you really don’t know whether in fact that is true. You need to be skeptical and check directly with whom they purport to represent before you send any money or give information,” Grant said.

In a new type of imposter scam, crooks infiltrate companies’ or organizations’ email systems and send messages purporting to be from the CEOs to employees with urgent instructions to wire money somewhere.

Tax and wage-related fraud were the most common forms of identity theft reported to the Federal Trade Commission last year, so it’s no surprise that tax ID theft was one of the fastest-growing complaints to state and local consumer agencies, the report says.

Aggressive sales tactics for solar power and electricity seem to be at the root of energy services comlais.

“Consumers are misled about the potential savings, locked into long-term contracts, and in some cases, discover that their service has been switched to another complaint without their consent,” the report states.

The top 10 complaints received last year by agencies participating in the CFA survey were automotive, home improvement/construction, utilities, credit/debt, retail sales, services, landlord/tenant, household goods, health products/services and Internet sales.

 

April 18 is tax day: Americans to pay $1.62 trillion, up from $1.54 trillion

April 18 is tax day.
April 18 is tax day.

Tax Day is Monday, and  personal finance website Wallet Hub has released some startling statistics about income taxes.

This year income taxes are due by April 18, due to Emancipation Day, a holiday celebrated in Washington, D.C.

Americans will pay an estimated $1.62 trillion in individual income taxes, up from $1.54 trillion in 2015.

More than 200 million Americans interact with the IRS each year, more than three times any other federal agency.

The average refund is $2,945.

Here are some more factoids:

  • 30.5 Minutes: Wait time for calls to the IRS in 2015.
  • 62 percent: Of calls went unanswered in 2015.
  • 6.1 Billion Hours: Time it takes Americans to do their taxes each year (16 hours per person).
  • 35 percent: Of taxpayers would rather discuss sex with their kids than do their taxes.
  • 27 percent: Of Americans would get an IRS tattoo to avoid taxes for life.
  • 60 percent: Of taxpayers will get professional tax help in 2016
  • $270: Average amount spent completing and filing in 2015
  • 92 percent: Of the federal government’s revenue comes from income taxes
  • 1.2 million: People get audited every year.
  • 150 million: Income tax returns will be filed in 2016.

Fake TurboTax email should be deleted. It’s a scam.

If you receive an email like this one, delete it.
If you receive an email like this one, delete it.

People are receiving fake emails purporting to be from TurboTax, and the company is warning people not to respond. They’re from scammers.

Last year and in prior years, criminals used TurboTax to file returns ahead of legitimate taxpayers. In some cases, they simply opened another account in the victim’s name, and were not caught by TurboTax. The result was an identity theft nightmare for the victims and delays in obtaining their refunds.

The fake emails have the title “TurboTax not working for days now…”

Intuit, the company which owns TurboTax, advises the following:

  • Do not open the attachment in the email.
  • Send a copy of the email to spoof@intuit.com.
  • Do not forward the email to anyone else.
  • Delete the email.

On the Internet, “phishing” refers to criminal activity that attempts to fraudulently obtain sensitive information.

Here’s what you can do to protect yourself from a phishing attack:

  1. If you suspect you have received a phishing email from Intuit, please forward it immediately to spoof@intuit.com. We will look into each reported instance.
  2. Make sure you subscribe to an anti-virus software and keep it up-to-date.
  3. Make sure you have updated your web browser to one that includes anti-phishing security features, such as Internet Explorer 7 or Firefox version 3 or higher.
  4. Make sure that you keep up to date on the latest releases and patches for your operating systems and critical programs. These releases are frequently security related.
  5. Do not respond to emails asking for account, password, banking, or credit card information.
  6. Do not open up an attachment that claims to be a software update. We will not send any software updates via email.
  7. Do not respond to text messages or voicemails that ask you to call a number and enter your account number and pin.
  8. Make sure you have passwords on your computer and your payroll files.