Avoiding Tax Fraud

During tax time, identity thieves are working hard to figure out ways to steal your identity…and your money. Here’s how you can stop them.

Tax time means different things to different people. For most of us, it’s a time to gather forms and other paperwork to figure out how much money we owe – or better yet – how much money we’re getting back. For identity thieves, it means coming up with new scams (or using old ones) to steal our personal information.

To stop identity thieves from committing fraud using our data, we must be vigilant. That means we need to be aware of the scams criminals use, as well as the ways to fight them.

SCAM: Suspicious Emails and Telephone Calls

Identity thieves, claiming to be from the IRS, scam people through emails and phone calls. Unsuspecting victims, worried that they might get in trouble if they don’t respond, are more apt to fall for this scheme. Many of these fraudulent emails and phone calls claim they need your personal information to:

  • Verify your citizenship
  • Send you your tax refund
  • Notify you that you’re being audited
  • Release your refund

HOW TO AVOID: According to IRS.gov, the IRS never sends emails or makes telephone calls that request personal information. So if you receive an email or phone call from someone saying they’re from the IRS, do not respond.

SCAM: Phishing Emails

Similar to the above email scam, “phishing” emails are those that appear to be coming from your bank or other trusted source but are actually sent by identity thieves.

For example, you’ve probably seen or heard commercials for Turbo Tax. Scammers are sending out emails asking Turbo Tax customers to “update their software”. When one clicks a link on the email, the customer is taken to a site that appears to be a Turbo Tax site but is actually a decoy site that infects the customer’s computer with a virus.

This type of phishing scam often asks the customer to provide personal information to log in to an account or verify one’s customer status. Once the customer is tricked into revealing financial and/or personal data, the criminal can use the supplied information to open new accounts or even file the person’s taxes and collect that person’s refund.


  • Update your computer’s anti-virus software on a consistent basis.
  • Know that your bank will never request you to send your passwords or personal information by mail or email.
  • If unsure of email legitimacy, type the URL directly into your browser.
  • Check browser for an icon of a closed lock or a URL that starts with https://.
  • Reject and delete any email that asks for confidential data.

SCAM: Misleading Tax Preparers

People often visit tax preparers they learned about through a flyer or other means of communication, only to discover they’re a fraud. The way it typically happens is:

  1. The preparer convinces the customer that it would be safer to have the refund sent to his or her office.
  2. When the customer goes to pick up their return from the preparer’s location, it’s gone – the office, the people and their tax return.
  3. The customer’s personal information, and oftentimes their tax refund, are now in jeopardy.

HOW TO AVOID: Choose your tax preparer very carefully using the checklist below.

Check the tax preparer’s:

  • IRS Preparer Tax Identification Number (PTIN).
  • Professional credentials (enrolled agent, certified public accountant, or attorney) and if he or she belongs to a professional organization or attends continuing education classes.
  • Qualifications using the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications.
  • Professional history with the Better Business Bureau. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy.
  • Service fees. Preparers are not allowed to base fees on a percentage of their client’s refund.
  • Availability after the return is filed.

Remember: Never sign a blank return and carefully review it before signing.

Tax season is also a time when many financial statements might be scattered throughout your home, your office and possibly your car. To help minimize the risk of an identity thief getting hold of your personal information…

  • Secure Your Documents. Make certain you always know where your documents are and keep them in a safe location.
  • Protect Your System. Regularly update your computer firewall, antivirus and antispyware software in order to keep hackers from retrieving your tax and other personal information.
  • Mail Security. Retrieve your mail daily and mail your tax documents directly from the Post Office. The less opportunity you give a criminal to steal your information, the less likely it is you’ll become a victim of identity theft.

There are some myFICO customers who have become Identity Theft victims, discuss their experience and even offer advice to help get through it. Visit myFICO forums to see their stories.

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Rob is a writer… of blogs, books and business. His financial investment experience combined with a long background in marketing credit protection services provides a source of information that helps fill the gaps on one’s journey toward financial well-being. His goal is simple: The more people he can help, the better.