With tax season here, it’s important to be aware of potential threats. Scammers tend to prey on taxpayers at a time when they are most vulnerable, particularly when they are worried about filing on time. They do this by impersonating bodies of authority such as the Internal Revenue Service (IRS), and by using official-looking logos and branding, making it difficultly to ascertain whether they are who they claim to be.

Awareness is key, and with some guidance and a few helpful tips, we hope to make this tax season a little less stressful.

What to be on the lookout for

The ultimate goal of a tax scam is for bad actors to trick people into either revealing personal information or making a payment, so they can file fraudulent tax returns and/or collect money. During tax season, some of the most popular scamming tactics involve the use of fake tax documents, vishing calls, phishing or SMiShing messages, fake charities, and company-targeted phishing. The breakdown of these methods are as follows:

• Fake tax documents: Fraudulent tax documents can arrive as email attachments or links to malicious sites. For example, one might receive a malicious attachment labeled “Tax Return Transcript”, claiming to be from a tax authority. But it’s best to verify its authenticity by using known official websites (preferably those you have previously saved as bookmarks) or phone numbers (not those provided in the email) and ask yourself whether or not you were expecting such an email. 
  
• Tax authority-themed vishing (voice phishing) calls: According to security researchers, vishing attacks increased over 500% in 2021, and the largest increase occurred during Q1 and Q2—tax time! Malicious callers may pose as a tax authority employee, demanding payment by attempting to convince you that you owe back taxes and you are receiving a final warning before they take legal action. Usually they request payment via prepaid debit card, gift cards, or wire transfer.
• Tax authority-themed phishing (email messages) or SMiShing (text messages): Received in the form of emails or text messages, this form of attack often includes official-looking logos or links to seemingly legitimate websites. Scammers will say they represent a tax authority, claiming that there is a problem with your return or that you are eligible for a larger refund. But remember, tax authorities will never ask for sensitive information via email or online.
• Fake charities: According to the IRS, one of the most common tax scams involves requests for tax-deductible donations from fraudulent “charities”. You can check the list of IRS-vetted (and tax-deductible donation-eligible) charities by using the IRS Tax Exempt Organization Search Tool. Take your time and do research on the organization before deciding to deploy any funds to their cause.
• Company-targeted tax form phishing: In recent years, there has been an increase in W-2 (tax form) phishing attempts. Scammers will send emails to HR or an employee at a particular company, pretending to be an executive, asking for all employee W-2 forms. This provides attackers with info on hundreds, if not thousands, of individuals, which is often resold or used for identity theft.
• False unclaimed refund letters: Although the IRS has stated it primarily contacts taxpayers through the U.S. Postal Service, in recent years, inauthentic letters advising how to gain access to unclaimed tax refunds have been arriving at taxpayers’ homes. While the letters may come in a cardboard envelope and include the IRS masthead, they fraudulently request that taxpayers furnish sensitive information via email or phone.

Remember that BNY Mellon and the IRS will never:

• Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.
• Threaten to immediately bring in local police or other law enforcement groups to have the taxpayer arrested for not paying.
• Demand that taxes be paid without giving taxpayers the opportunity to question or appeal the amount owed.
• Call unexpectedly about a tax refund.

This year, you should also be cautious of promoters that claim their services are needed to settle with the IRS, that tax debts can be settled for “pennies on the dollar”, or that there is a limited window of time to resolve tax debts through the Offer in Compromise (OIC) program.[1]

What you can do

While it may seem like there is a lot to remember, focus on these tips:

• File your taxes early. If someone has already filed for you fraudulently, it can be more difficult to rectify your account. BNY Mellon offers centralized access to tax forms through the Wealth Online Tax Center. These include investment management and consumer banking account forms such as 1099s and K-1s.
• Remember that the IRS does not initiate contact with taxpayers via text message, email or social media. Do not respond to any threat coming from these channels, even it appears legitimate. Stay vigilant and skeptical.
• If you receive a suspicious unsolicited email surrounding a tax penalty or payment, report it to your trusted tax advisor and the IRS at phishing@irs.gov.
• If you have questions about your taxes, please contact your tax advisor as well as your BNY Mellon relationship manager to discuss the most suitable strategies for your situation.

If you plan to share sensitive financial documents with your relationship manager this tax season, BNY Mellon offers an easy way to send them through File Vault, a secure document portal accessible via Wealth Online. If you have a Wealth Online account, you already have access to File Vault and the Tax Center. But if you don’t, click here to enroll today.