With the looming Tax Day ahead and the pressure building on last-minute filers, a surge of fraudulent IRS activities is emerging.
Recent studies carried out by the expert researchers at McAfee Labs anticipate a fresh influx of sophisticated tax frauds during the peak filing period, primarily driven by deceptive text messages.
An approximate of half of taxpayers complete their tax duties between mid-March and April 15, providing scammers with ample opportunities to exploit the rushed nature of filings with the IRS.
Drawing insights from our 2024 data, here are the projections for the days to come:
- Anticipated Increase in Tax Frauds: The number of malicious tax scam web links almost quadrupled from February 1 (2.9% of total activities) to February 28 (10.5%) last year, with the peak spike noted towards the end of the month.
- Prevalence of Mobile Misdirections: 76% of all tax scam activities in 2024 were targeted towards mobile users through text communications, often camouflaging fraudulent links via URL shortening techniques.
- Strategically Organized Fraudulent Campaigns: A singular campaign was responsible for 17.3% of all blocked URLs linked to tax-related frauds in 2024, deploying fake IRS-like web links such as “irs.gov.tax-helping[.]com”.
Apart from impersonating the IRS, scammers are also likely to mimic tax preparation and software firms. Furthermore, taxpayers should be wary of scams disguised as quick refund services and seamless filing solutions, which are often facades concealing fraudulent activities. Regardless of the disguise used by scammers, their objective remains consistent – to deceive taxpayers into disclosing their personal and financial information.
Common Deceptive Tax Schemes to Stay Cautious About
During the tax season, scammers capitalize on the collection and sharing of personal information online, exploiting the lowered defenses of many taxpayers. The familiarity with tax-related correspondences makes individuals more susceptible to revealing sensitive personal details, which scammers exploit in various ways, aiming to:
- Acquiring Account Information – Scammers attempt to hijack account details or financial information linked to credit cards and bank accounts in order to steal funds and make unauthorized purchases.
- Submitting False Returns – Scammers endeavor to file counterfeit returns under a victim’s name to claim refunds, leaving the victim with financial losses and fraudulent claims to address.
- Engaging in Identity Theft – Scammers leverage stolen information to open fake credit lines and accounts using a victim’s identity.
- Reselling Stolen Information – Scammers can profit by selling pilfered data on underground markets, allowing other malevolent actors to use the information for identity theft purposes.
The detrimental impact of tax-related scams lies in their focus on obtaining our most sensitive personal identifier – Social Security Numbers (SSNs).
A compromised SSN can lead to severe forms of identity theft, including imposter scams, insurance fraud, employment-related fraud, and more. These subsequent attacks can inflict significant financial and reputational harm on victims, requiring substantial time and effort to remediate.
Operational Tactics of Tax Frauds
Tax scams typically execute a two-pronged approach to ensnare victims.
Initiating with luring victims through fraudulent messages masquerading as the IRS, tax preparation agencies, or tax software providers, scammers deploy various communication channels such as emails, social media direct messages, and paid search outcomes.
Primarily targeting victims through text communications, scammers capitalize on the popularity of mobile platforms for executing their deceptions. Often resorting to link shortening techniques, scammers cloak their malicious activities behind shortened URLs which can be difficult to ascertain promptly.
In some instances, scammers make attempts to deceive taxpayers by incorporating “irs.gov” within the website address. An example includes domains like “entes-tax[dot]com”, posing as “irs.gov” but redirecting to fraudulent websites.
Deceptive texts inserting “irs.gov” within a harmful hyperlink
Regarding the message content, scammers deploy urgent-sounding texts concerning tax refunds such as, “Your reimbursement is in limbo, reach out to the IRS immediately.” Some fraudsters resort to intimidation, issuing ultimatums like imprisonment for non-payment. Alternatively, scammers may threaten to annul privileges like driver’s permits, commercial licenses, or even immigration status. As per the IRS, these represent typical indications of fraudulence. The IRS never resorts to threats or strategies like these to settle tax dilemmas.
The subsequent blow occurs upon clicking the embedded links in these messages, leading to counterfeit IRS fraud sites. They can be quite convincing. The most elaborate ones mimic the appearance and ambiance of the official IRS portal and employ URLs that bear a striking resemblance to an authentic IRS link, deluding individuals who do not scrutinize them closely.
Illustration of a counterfeit IRS claim webpage
This is where the real harm is inflicted. Under the pretense of a refund or payment, scammers amass critical personal information discussed earlier, resulting in immediate and enduring repercussions for victims.
A similar strategy applies to scammers masquerading as tax preparation services and tax software providers. The texts and websites may differ in appearance, yet bear the same motive of harvesting identical categories of personal and financial information.
Techniques To Steer Clear of Tax Scams
Clever though these frauds may be, they can be evaded. The initial step involves awareness. By perusing this piece and disseminating it, you raise awareness about these scams and their prevalence.
Subsequently, various precautions can be taken to enhance your safety during tax season:
- Remain wary of emails and calls asserting IRS affiliation. The IRS generally communicates via conventional mail, not email or text messages. (Consult their guidance on IRS communication methods for further insights.)
- Avoid disclosing personal information over the phone. The IRS never solicits personal details via phone calls, and no government entity will ever demand payment over the phone. Requests for payment through methods like money orders, gift vouchers, or online payment platforms other than IRS.gov should ring alarm bells.
- Directly validate websites and emails. Even if they appear to be from a reputable taxation advisor or partner, authenticate them directly instead of clicking on links sent via emails or texts.
- Utilize online safeguards that detect fraudulent activities. Functionalities within our McAfee+ packages can aid in identifying bogus websites and texts and our Web Protection and Online Account Cleanup specifically alert you of suspicious links that may direct you to an untrustworthy site and assist in safeguarding your Internet profiles. If you unintentionally select or tap on a harmful link, they will block those websites.
- Implement preventive measures. Inspect your credit history for any suspicious activity, ensure tight privacy settings for your social media, and establish strong, individual passcodes for your accounts. The McAfee+ packages come with utilities that can handle all of this in one place.
- Eliminate your private information from untrustworthy data brokerage websites. Scams through emails, calls, and messages usually need a piece of information – your contact details. Scammers commonly source this from data brokerage platforms. These entities acquire, assemble, and trade extensive personal data obtained from various public and private outlets. Our Personal Data Cleanup scrutinizes some of the most hazardous data brokerage sites and reveals those involved in selling your personal details.
- Finally, submit your tax returns expediently. One effective method to thwart scammers from claiming your refund is by claiming it yourself. In certain instances, taxpayers only ascertain that they’ve been deceived once they file a return—only to realize that it has already been filed.
The article Your Phone Is the #1 Target in a New Wave of IRS Scams, McAfee Finds was initially published on McAfee’s Blog.
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