While Americans are preparing their tax returns, scammers are hatching elaborate schemes to steal money and valuable personal information.

Indeed, last year, Forbes reported that more than 200 employers were victimized by W-2 scams. As Forbes described, “In a typical attack, the head of human resources receives an email appearing to come from their CEO asking for a copy of the company’s W-2 records. The HR person, seeking to be responsive to the CEO, quickly complies, and soon everyone in the company is a victim of identity theft and likely tax fraud.”

W-2 forms list employees’ earnings, tax withholdings, Social Security number and address – a goldmine of personal information. These crooks then file fake tax returns, get refunds and abscond with the actual taxpayer’s money. 

In a new twist, criminals are doubling down on this scheme this season, according to the IRS. They steal data from tax preparers, including bank account information. They file tax returns, so refunds are deposited into taxpayers’ real bank accounts. Then they call taxpayers, pretending to be from the IRS. They say the funds were deposited in error, and direct taxpayers to transfer money into a fraudulent account. As The Washington Post summarized, “…since nobody in their right mind wants to mess with the IRS, they are eager to cooperate.”

How can taxpayers protect themselves from these scams?

Given that paying taxes is unavoidable, here are some ways to keep your identity and bank account safe this season:

• Safeguard your information. If you file taxes through an online service, make sure you use a secure connection. The California Data Protection Act requires websites that collect personal information to post and comply with privacy policies. Take the time to read these statements before trusting an online tax service.
• Update your privacy settings. Even if you used the same tax service last year with no problems, it’s a good time to change your passwords. If you have been affected by the Equifax security breach (or have had your information stolen in the past), it’s prudent to change your passwords and security questions.
• Don’t fall for phishing scams. The IRS will never:

• • Initiate contact via email, text messages or social media.
  • Demand a specific payment method over the phone.
  • Demand that you pay taxes without the opportunity to question or appeal the amount. 
  • Threaten to have you arrested. 
  • Revoke your driver’s license, business licenses, or immigration status.

• Report suspicious activity. Remember the IRS will not initiate contact over email; do not open attachments or reply to suspicious emails. If you receive a letter in the mail, go to the official IRS website for a phone number – don’t call the line listed without verification.If you receive a phone call from a suspicious person, ask for the employee’s name, badge number and call-back number. Hang up and call the official IRS phone number to confirm it’s a legitimate contact before you engage.Should you find yourself the victim of a tax scam, contact the IRS immediately.

Companies that store your personally identifying information have a legal obligation to keep that data secure. Privacy laws protect consumers and employees who have been victimized by data breaches; privacy lawsuits allow victims to recover their financial losses, and, in some cases, statutory damages. If your employer or tax preparer has been negligent with your data, contact Keller Grover at 866-663-3308 for a free consultation.