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Thieves Thrive on Tax-Season Scams
It's that time of the year again.By the end of the month, employers will finish distributing W-2s and 401(K) statements. Workers longing for a big refund will file their state and federal income tax returns — and criminals will be on the prowl.
The number of fraudulent tax returns filed because of identity theft has increased by more than 500 percent between 2002 and 2007. The Federal Trade Commission received more than 56,000 complaints in 2007 alone.
There are simple things everyone can do to safeguard confidential information, however.
“A lot of it is just common sense,” said Bob Helms, a Fauquier County resident who's volunteered for the Volunteer Income Tax Assistance program for nearly 20 years.
Perhaps the most important thing to remember, he added, is that the IRS doesn't send e-mail to taxpayers regarding refunds or audits. By keeping this in mind, Helms said people will be able to recognize a well-known scam called phishing.
The IRS has identified phishing as a strategy used by Internet-based thieves to “trick unsuspecting victims into revealing personal information they can then use to access the victims' financial accounts.”
The crooks send out e-mail messages from what appear to be a legitimate entities, such as the IRS. In the message, perpetrator(s) ask for certain information, such as the victim's Social Security number or bank account number. They then use it to empty bank accounts, get loans or obtain credit cards in the victim's name.
Taxpayers who receive unsolicited e-mails that claim to be from the IRS can notify the agency by forwarding the message to a special electronic e-mail box at phishing@irs.gov.
The agency said taxpayers forwarded more than 33,000 scam e-mails revealing 1,500 schemes to the IRS as of last March.
According to Helms, another tax-related scam surfaced last year. He said people received phone calls from con men claiming to be from the IRS. The perpetrator(s) would tell the victim to verify personal information in order to get an economic stimulus payment.
The IRS identified the scam as the second most egregious tax scam and scheme of 2008 and reiterated that representatives of the agency do not call anyone regarding economic stimulus payments or rebates.
Mike Prusinski is the vice president of public affairs for LifeLock, a company that helps people protect vital personal and financial information.
He urged people who prefer filing their taxes online to make sure their computers are secure. Specifically, he suggested that people update their firewalls and that any “peer-to-peer” programs such as music-sharing programs, are removed from the machines. Some such programs can allow people to access sensitive information from your computer, he explained.
Not all criminals use high-tech methods to swipe personal information. Since "dumpster diving" is a common tactic, Prusinski and Helms both advise taxpayers to keep what they need and be careful about how they get rid of the rest.
“Shred what you don't need before you throw it away,” Prusinski said.
Certain precautions should also be taken when it comes to mailing your tax returns. Specifically, Prusinski said the returns should never be left in the mailbox for the postman to pick up. Take the packages directly to the post office.
Finally, both men reminded taxpayers to be selective when choosing a tax preparation service. Prusinski advised comparing firms and consulting the Better Business Bureau before making a final selection.
“Personally, I am not aware of anyone who's been a victim of phishing or any scams like that,” Helms said. “But I have heard about cases [involving] crooked tax preparers.”
Information about how to choose a tax preparer and avoid preparer fraud can be found on the IRS Web site at www.IRS.gov.
E-mail the reporter: abogdanovic@timespapers.com
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