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Mar 19, 2019 bjohnson

Tax Fraud May Be Down, But Fraudulent Returns are Up

lady with tax papers

If your customers have yet to file their 2018 taxes, they’re not alone. In fact, they’re one of a large group of procrastinators that waits until the last minute to file their taxes: the Internal Revenue Service (IRS) says about one in five tax filers waits until the last two weeks before the filing deadline to file, and one in seven wait until the very last week. Perhaps this isn’t so surprising given how much people truly dislike doing their taxes. According to the personal finance site Wallet Hub, 51% of people would rather report to jury duty instead of filing taxes, and 10% of people would rather drink expired milk. Now that, understandably, may come as a surprise.

Despite the ever-increasing calls to file early to reduce one’s tax-fraud risk, it’s safe to assume that many of your customers still have yet to file. Fortunately, the number of reported tax fraud victims in 2018 was down 19% from 2017 and 72% lower than in 2015, according to IRS. The downward trend is likely to continue; however, just as we can always be certain that there will be taxes, there will also always be tax fraud and scams (both of which are well underway at this point). In its interim report, the Treasury Inspector General for Tax Administration found that as of February 24, 2018, the IRS reported that it identified 9,557 tax returns with approximately $46 million claimed in fraudulent refunds. And that was just partway through last year’s tax season. In 2017, there were a whopping 242,000 victims of tax fraud, many of which faced major delays – up to eight months in those days – in getting their refund.

Fortunately, there are safeguards you can provide to your slow-to-file customers to best protect themselves.

  • Find a Reputable Accountant or Tax-filing Software – and do it now! Not only does using an accountant or online filing services reduce your chances for errors, finding filing support can help you file more securely. However, not all tax preparation is created equal. It's best to avoid tax preparers who promise they can obtain a higher refund and to avoid preparers that base their fee on the amount of a return. The IRS provides a convenient tool to identify properly-credentialed preparers for your employees.
  • Sign up for Scam Alerts from the FTCto stay abreast of all the dirty tricks scammers are currently using.
  • Never send emails with personally identifiable information (PII) attached. It’s best to never send them through email at all, but if you must, you can encrypt your message by making a change in your email’s security settings.
  • Beware of computer scams. These can come via email or as popups on your computer asking for your personal information. The IRS saw an approximate 60% surge in phishing and malware incidents in the 2018 tax season. Our Resolution Center has dealt with hundreds of these cases, but most are easy to avoid, especially with our proprietary Online Data Protection suite, which includes anti-phishing and anti-keylogging software.
  • Never provide any personal information over the phone to someone who says they are from the IRS. The IRS will never contact you via phone, email, or social media. Listen to an IRS scam phone call one of our employees received.

One of the best ways for you to help your customers mitigate risk and keep them protected during tax season is to offer a comprehensive identity protection service like GGA’s. To learn more about how providing identity protection to your customers can help fortify their trust in your company, act as an additional touchpoint to keep them engaged, and be an additional revenue stream for your business, request a demo.

Published by bjohnson March 19, 2019