In spite of everything happening in the world right now—the 2020 tax season is about to come to an end, and taxes are due.
Americans got a reprieve back in March when the US Treasury Department and Internal Revenue Service (IRS) announced they were pushing back the federal income tax filing due date from April 15 to July 15, 2020. Fast forward three months and here we are, filing taxes during a worldwide health crisis and the most extreme social unrest the US has seen since the 1960s.
If only we could magically write off this entire year (like those Zoom calls with your therapist, aka “medical expenses”). And because time is relative, 2020 is absolutely the longest year in human history. Presidential election in November? I’ll die of old age before then.
While you’re preoccupied with, oh you know, avoiding serious illness and fighting for basic human rights, it’s business as usual for cybercriminals. Cybercrime tends to spike during tax season as scammers take advantage of all the valuable data floating around the Internet. These attacks follow a few tried and true methods, usually a phishing email or scam call from someone purporting to be from the IRS or an accountant offering to help you get a bigger refund.
This year, however, cybercriminals are exploiting the nation’s anxiety around COVID-19 and the increasingly grim economic outlook. The IRS has released multiple consumer alerts since shelter in place started back in March, warning Americans to be on the lookout for email and phone phishing attacks aimed at stealing refunds and Economic Impact Payments (EIP).
Beyond having your money stolen, tax ID theft can also damage your credit and cost you in time. It can take upwards of 600 hours to restore a stolen identity, according to the Identity Theft Resource Center.
Fortunately, protecting against the various tax season scams is relatively easy. All it takes is a little common sense and a basic understanding of the social engineering ploys scammers will try to use against you. With that said, here are some tried and true tips to help stay secure during this very unusual tax season.
For general tax preparedness
If you haven’t already filed, now’s the time to get a move on. Not only will you beat the rush, but you can ensure a faster return on your return. Mistakes, including those that can lead to identity theft, are made when you’re scrambling to dig up that charitable donation receipt from Goodwill five minutes before filing deadline.
Next, pick a preparer. Do your due diligence and check out any reviews or articles on tax software, if you plan to use it. Research online tax service providers to see how secure their systems are. Sites should have password standards, a lock-out feature that blocks users after too many unsuccessful login attempts, security questions, and email and/or text verification. If using an accountant, look for referrals. Remember that cheapest may not always be the best.
Finally, once you’ve filed, make sure to keep your tax returns someplace safe. If filing online, you’ll receive a massive PDF that you can download to your desktop. If someone were to access your computer a year from now, all that juicy information would be theirs for the taking. So be sure to either store it in an encrypted cloud service or put it on a removable drive, such as a USB. If filing on paper, keep your taxes in a locked file cabinet or drawer.
For online security
This is important for anyone transmitting sensitive data online, whether that’s shopping or filing taxes: be sure to use a connection that’s secure. If on a home computer and network, use password-protected Wi-Fi and look for properly-secured browsers (website URLs that start with “https” and display a small lock icon). Be sure your preparer has the same security in place. Never, ever, ever file your taxes using public Wi-Fi.
In addition, when filing taxes online (and again, this applies to any online service that requires a password), choose passwords that are long and complex. Avoid plain text passwords, use special characters, and if allowed, use spaces. We also highly recommend a password vault or manager that uses two-factor authentication.
The third pillar of Internet security (especially during tax season) is to be aware of social engineering scams, including phishing emails. A popular phishing technique is to send an email from the “IRS” that says, essentially, “We have your tax return ready and you can get your money faster if you just download this PDF!” Nope. Number one, you should never open an attachment from an email you aren’t expecting to receive. Number two, the IRS will not email you. They’ll physically mail you information, but even then, be wary. Tax scams can happen via postal mail, too.
In addition to phishing attacks, there are reports of cold callers who say, essentially, “Hey, we’re from the IRS and you owe us $10,000.” Nope. The IRS won’t call you either. If you receive an email or phone call that’s unsolicited and is looking for personal information, don’t give it. Go back and independently verify who is trying to reach you.
Since shelter in place started back in March, criminals have been using a variety of phishing scams relating to coronavirus. Be wary of any emails purporting to be from the IRS or otherwise, throwing around the terms “coronavirus, “COVID-19,” and “stimulus.” Be especially wary of anyone claiming they can get you additional EIP money or a bigger refund.
After mastering the basics of online security, it’s a good idea to protect yourself using a little technology. Before you even start typing in your social security number, you should run at least one cybersecurity scan. That way, you’re sure there’s no malware on your system, such as a keylogger or spyware that can record your information without you knowing. You should also make sure your operating system, browser, and other software programs are updated—that way, you protect against malware that might exploit vulnerabilities in your computer.
Finally, if you believe there’s a chance you could have been compromised, look into free credit monitoring or ID theft services. (A caveat to this: Only use the free services, as paying for them is unnecessary and redundant with what credit card companies and banks are already doing.) By law, you are entitled to a free copy of your credit report from the major bureaus: Equifax, Experian, and Trans Union. In addition, there’s a lesser-known fourth bureau called Innovis that you can also use. Review your reports annually and look for any suspicious activity.
Filing early, being prepared, staying vigilant online, and employing the proper security technology—if you follow these tips then you can not only keep cybercriminals from cashing in on your tax returns but also from taxing your peace of mind.