Here are Steps for Tax Professionals and Citizens to Steer Clear of Scams

Taxation can be a hassle and an increasing number of people are turning towards digital tools to take care of their taxes. Typical phishing scams, often initiated via urgent emails or texts impersonating banks or delivery services, have grown more sophisticated with time, since scammers are now using tactics like impersonating tax software companies and even celebrities to target unsuspecting individuals and tax professionals.

How cybercriminals target tax professionals

One particularly deceptive scheme deployed by scammers involves them posing as potential clients, soliciting services for the upcoming tax season. These emails, often disguised as inquiries from legitimate individuals, aim to deceive tax professionals into disclosing sensitive information or downloading malicious attachments.

As part of a recent scam, tax professionals were targeted with requests for their electronic filing identification number (EFIN) account summaries, under the guise of verification processes. This information, crucial for electronic tax filings, could be exploited by cybercriminals to file fraudulent returns or compromise sensitive client data.

Despite efforts by the IRS to review and deactivate compromised EFINs, tax professionals are urged to remain vigilant. Strong password practices and cautious handling of suspicious emails are essential measures to mitigate the risk of data theft. However, the evolving nature of phishing scams means even seemingly innocuous emails, such as those from "new clients," must be treated with suspicion.

April Walker of the American Institute of CPAs highlights the relentless nature of cyber criminals, who continuously refine their tactics to lure unsuspecting victims. Walker emphasizes the importance of scrutinizing all incoming communications, as scammers increasingly impersonate familiar contacts or trusted entities to deceive recipients.

Expert tips for tax professionals

In the face of escalating cyber threats, tax professionals must remain vigilant and equipped with effective strategies to counter potential scams. April Walker, a lead manager for tax practice and ethics at the American Institute of CPAs, emphasizes the importance of having a comprehensive action plan ready to address any data breaches promptly.

The risks of fake emails are particularly concerning, especially if tax professionals inadvertently download sensitive client information or access fraudulent websites. In such instances, cybercriminals could gain unauthorized access to crucial data, including email addresses, passwords, and other sensitive information, or deploy malware to compromise systems.

The IRS recommends that tax professionals promptly report any instances of data theft to their local IRS stakeholder liaison. By alerting the relevant authorities swiftly, professionals can facilitate the implementation of protective measures, such as blocking fraudulent returns and safeguarding clients' interests. Furthermore, tax professionals are urged to exercise caution when encountering requests for e-signatures in emails. These requests may be accompanied by prompts for personal information or malicious attachments that could expose recipients to malware.

Amber Gray-Fenner, an enrolled agent based in Albuquerque, New Mexico, underscores the importance of distinguishing between legitimate and fraudulent communications. Gray-Fenner advises against accepting client information via email, emphasizing the use of secure portals for data exchange.

Gray-Fenner highlights several red flags to watch out for, including unusual graphics or hand-drawn elements in emails, as well as notifications indicating the urgency or high importance of a message.

Taxpayers should remain vigilant amidst a surge in scams targeting various government agencies, not just the IRS. The Consumer Financial Protection Bureau warns of scammers impersonating agency employees, particularly preying on older adults with promises of class-action lawsuit participation or false claims of lawsuit winnings, requiring upfront fees. To verify suspicious calls, consumers can contact the bureau's call centre at 855-411-2372. Verify sender identities through independent phone numbers and avoid rushing to respond to requests for updates from any organization, especially during the busy tax season when scammers exploit stress and exhaustion.