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identity theft

Identity Theft Red Flags Tax Pros Should Know

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Recently, the IRS, state tax agencies, and the U.S. tax industry hosted a Security Summit to help taxpayers combat identity theft refund fraud. In this article, we’ll share our top takeaways from the Summit as well as a few other red flags and best practices to help you protect your clients’ information and your business from identity theft. Identity Theft Red Flags As a tax professional, you need to be vigilant while watching out for identity theft red flags, both in your business and for your clients.  Here is a list of red flags to watch out for that pertain to your business: Beware of these identity theft red flags when talking to and working on behalf of your clients: How to Respond to Identity Theft Red Flags as a Tax Pro If you suspect that your business is a victim of identity theft, then you need to carry out the following actions ASAP: If you suspect that your client has become a victim of identity theft, it is crucial that you or your client promptly contact the IRS. Then encourage your client to seek assistance from insurance or cybersecurity professionals to determine the cause and magnitude of the damage. eFile360 Can Help Tax Pros Avoid Identity Theft We help tax pros like you e-file 1099, 1098, W‑2, and Affordable Care Act forms. Learn how eFile360 works at this link.  To help you and your clients avoid identity theft, we offer a TIN Checking add-on service to help you validate the recipient's Tax ID. This service can give you and your client peace of mind.  Here’s how our TIN Checking service works: We will cross-check the tax ID and name combination to ensure accuracy. In case of any inconsistencies, we will notify you so that you can verify the details with your client and make necessary corrections. Once the information is corrected, we will conduct another verification on your behalf. If everything aligns correctly, we proceed with e-filing your form. In addition to our TIN Checking …

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IRS Warns about 2022 Tax Scams

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Since the beginning of the pandemic, scammers have only gotten more creative. Let’s discuss some of the tax scams the IRS has recently warned taxpayers about. 2022 Tax Scams At the beginning of February 2022, the IRS published a news release urging taxpayers to stay vigilant and to watch out for these recent tax scams. Some of the big areas of interest this year include text message, email, and phone scams. There’s also been increasing unemployment fraud attempts. Here are some of the tax scams to look out for, and some tips and tricks for determining if a message is legitimate or fraudulent. Phone and Text Tax Scams If you receive a call from the IRS, you probably didn’t receive a call from the real IRS. The IRS doesn’t ever leave intimidating, urgent, or aggressive voicemails for taxpayers. One of the most common tax scams includes a phone call in which the recipient is told that if they don’t act immediately, they will be arrested. Many times, these calls are looking to instill fear and coerce individuals into giving them a credit card number or other information to settle debt quickly so they can avoid court or jail time. Many of the text message scams stemmed from phony requests for the sake of helping the recipient gain access to or confirm a stimulus payment. COVID pushed a lot of normally “unplugged” products, services, and processes into the online sector. That created more opportunities for fraudsters to take advantage of people who are unfamiliar with the latest technology-based updates that have been put in place for tax filing, direct deposits, and so much more. Unemployment Fraud The IRS also warned of unemployment fraud schemes that stemmed from organized crime circles. The victims of this tax scam would receive unemployment or other benefit payment notices sent from the IRS. These forms are filled out on the taxpayer’s behalf by a criminal looking to collect on benefits you never applied for or reported. If you receive …

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Recap of National Tax Security Awareness Week

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This year, National Tax Security Awareness Week was November 29 through December 3. Let’s go through some of the highlights. What is National Tax Security Awareness Week? Before we get into the details, you might be wondering: what is National Tax Security Awareness Week? In 2015, the IRS held a summit that called for public and private tax and administration leaders to come together to promote best practices for combating tax-related identity theft. Since then, the IRS and Security Summit partners dedicate one week per year to sharing knowledge and insights about how to protect your personal and business tax information, as well as top security tips for storing sensitive information and recognizing threats. The first few years’ worth of tips can be found here. Keep reading to learn about the insights shared during the 2021 National Tax Security Awareness Week. Protecting Against Tax-Related Identity Theft & More This year, like always, the IRS shared a ton of great tips and insights that both speak to the current state of security and also offer a path forward. The first thing they shared was a video describing the new IP PIN, an optional extra layer of security for information shared between you and the IRS. The IRS then talked about 10 key steps for protecting sensitive information. We’ve included our favorites here: “Phishing scams – like imposter emails, calls and texts -- are the No. 1 way thieves steal personal data. This year, fraud scams related to COVID-19, Economic Impact Payments and other tax law changes are common.” Only use websites with addresses beginning in "https" – the "s" is for secure communications. With the major shift in employees working from home, a VPN (virtual private network) is the best way to create a secure connection between your home and work networks. Beware of Fake Charities The second day of National Tax Security Awareness Week fell on Giving Tuesday, which gave the IRS a great opportunity to …

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