Watch Out for These Tax Scams -- Even If You Already Filed Your Return

By Matthew Frankel Markets Fool.com

I've written before about tax-related scams, as criminals have been successful in stealing millions of dollars from unsuspecting taxpayers over the phone and through the internet. Unfortunately, this is the time of year where scams tend to heat up. In fact, the IRS is warning taxpayers of some sophisticated last-minute tax scams to watch out for.

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What is a phishing scam?

Phishing scams generally refer to scams via email, although they can take other forms such as text messages. And these have become a big problem -- the IRS saw a 400% surge in phishing and malware incidents during the 2016 tax season alone. So, it's fair to assume they'll continue to be a major issue in 2017.

Image source: Getty Images.

These scams take many different forms, but the general goal is to trick people into clicking on a malware-infected link or attachment, revealing personal and identifying information about themselves, or simply to steal the victim's money.

For example, one popular phishing scam involves an official-looking email that appears to be from the IRS, which takes you to a phony IRS website (that looks real), where you're instructed to update your IRS file right away. Once you do, a thief will have information such as your Social Security number, bank account information, or credit card number.

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Last-minute scams to watch out for

The IRS and other law enforcement agencies have gotten much better at safeguarding against identity theft and combating tax scammers. However, the scams continue to evolve and become more sophisticated in order to trick people into revealing sensitive information, or to get them to unknowingly send money to criminals.

A common scam this time of year is an email that is supposedly from a tax software provider (such as TurboTax or TaxACT) that asks the taxpayer to update their information, with the intention of stealing potentially lucrative identifying information such as Social Security and bank account numbers. Similar fraudulent emails posing as being sent by banks, credit card companies, or even the IRS are quite common attempts to obtain this type of information.

Know what to look for, and you'll be fine

The good news is that phishing scams like the ones discussed here are 100% avoidable by taking extra steps to confirm the authenticity of any communications you receive.

For example, if you receive an email or other communication that supposedly comes from the IRS itself, it's relatively easy to spot a scam. By knowing what the IRS won't do, you can easily identify when something isn't right. For example, the IRS will never initiate contact by email, and will never expect you to give your credit card or bank account information over the phone.

On the other hand, if you receive a tax-related communication from another organization, such as from your bank or tax software provider, it's a good idea to call them to verify the authenticity, even if you're nearly certain that it's real. For example, if I get an email message from my bank -- say, to confirm certain information about my tax refund -- I'm going to call the bank's actual customer service number (from their website, not the email) to confirm that the email actually originated from the bank.

Finally, never open an email attachment or click on a link within the email unless you are 100% certain of the source of the email. Doing so can easily infect your computer with malware, which can also steal your information.

The bottom line is that while it may seem like an inconvenience to take extra steps to verify the authenticity of tax-related correspondence, it's certainly better than falling victim to a tax scam.

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