Identifying Today’s Tax Scams and Protecting Your Identity

Each summer, the IRS and its Security Summit partners provide guidance to help taxpayers guard against identity theft and fraud. As scams and schemes become more sophisticated and harder to detect, adopting a few disciplined habits can significantly reduce your risk. Please keep the following recommendations in mind.

Exercise Caution with Any Message Claiming to Be From the IRS

IRS impersonation is one of the most common and effective tactics used by criminals. Fraudsters send emails and text messages, spoof caller identification, and use automated calls to pressure individuals into clicking malicious links, opening harmful attachments, or sharing personal information.

Keep in mind, the IRS will not contact you by email, text message, or social media to demand payment or request personal information. Notification will be via U.S. Mail.

Be especially cautious of any message that:

• Demands immediate action or threatens arrest, penalties, or legal consequences.
• Requests payment via gift card, wire transfer, or cryptocurrency.
• Contains an unexpected link or attachment, even one that appears official.

If you receive a suspicious communication, do not click any links or open attachments. Contact our office, and we’ll help you verify its legitimacy.

Consider an Additional Safeguard Through an IP PIN

The Identity Protection PIN (IP PIN) is a free and effective safeguard for taxpayers. This six-digit number protects your tax return, ensuring that even if someone obtains your Social Security number, they cannot file a return in your name without your unique code.

Consider the following:

• The IP PIN is available to any taxpayer who requests one, not solely to those who have previously been affected by identity theft.
• The IRS issues the IP PIN and refreshes it periodically to maintain security.
• Enrollment is available through your IRS Online Account.

If you are unsure whether an IP PIN is right for you, we would be happy to discuss it. If you choose to obtain an IP PIN, please keep a record of it in a safe, secure location and include the IP PIN with your tax documents each year. A new, unique PIN is required annually for both you and your spouse, if applicable.

When you obtain an IP PIN, keep a record of it in a safe, secure location and include a copy of the IP PIN when you submit your tax documents to your CPA each year.

Remain Vigilant Against AI-Enabled Calls and Messages

Technological advances have introduced new risks. Fraudsters now use artificial intelligence to replicate voices and compose messages that convincingly imitate trusted parties, including financial institutions, employers, and accounting professionals. According to the Security Summit, schemes have already resulted in losses totaling hundreds of millions of dollars.

Should you receive a suspicious message, we recommend the following precautions:

• Verify before acting. When an unexpected request is received, contact our office at 215-675-8364 and ask for your tax professional, rather than any number provided on the call or in the message.
• Proceed deliberately. Urgency is a common warning sign of fraud. A legitimate request will allow time for verification.
• Rely on your judgment. If a communication appears suspicious, it warrants more scrutiny.

Keeping your Personal Identifiable Information (PII) and finances secure will always be a priority for our firm. We will continue to transmit your tax documents exclusively through secure, encrypted channels. Please note that we will never request sensitive information via an unexpected email or text message. Should you ever receive a communication alleging to be from the IRS or from our firm that seems suspicious, please contact us directly at 215-675-8364.

Being proactive is essential in this era of scams and impersonation. We appreciate your willingness to share concerns before any potential fraud occurs.

Should you need clarification or have questions on this or other matters affecting you or your business, please call 215.675.8364 or email us to speak with a CPA today.

DISCLAIMER: All communications by Wouch, Maloney & Co., LLP intend to provide general information, as of the date of the communication, and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. Please be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.