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Stay ahead of con artists by filing taxes early

March 15, 2017 GMT

As the deadline to file taxes gets closer, instances of tax fraud are on the rise. According to AARP, filing your taxes earlier could help reduce fraud.

“AARP recommends that taxpayers file their returns as soon as they receive all of the necessary paperwork,” said Devorah Lanner, communications director for AARP Nebraska. “By waiting close to the filing deadline you are giving an identity thief the maximum amount of time to steal your personal information and file a fraudulent return.”

According to the Internal Revenue Service, taxpayers lost more than $3 billion to tax-related identity theft in 2014. This occurs when someone steals a Social Security number and files a fake tax return under someone else’s name, in order to claim a fraudulent refund.

In a statement issued earlier this month, IRS Commissioner John Koskinen urged taxpayers to be cautious with their personal information.

“The IRS works year-round to protect taxpayers against scams and identity theft,” Koskinen said. “But we can’t do this alone. Taxpayers can do their part by taking certain precautions to stay ahead of these would-be con artists.”

The agency said personal information should be treated like cash — you wouldn’t hand cash out to just anyone. Numerous steps can be taken to prevent personal information from getting into the wrong hands.

Taxpayers shouldn’t open unsolicited emails from the IRS, as phishing scams continue to be on the IRS’ list of scams to avoid in the 2017 filing season.

During the 2016 tax season, the IRS saw a 400 percent surge in phishing and malware incidents. Scammers use emails designed to trick taxpayers into thinking the message is an official IRS communication. In some cases, scammers use text messages instead of emails. The messages contain links to websites that ask for information including Social Security numbers, which are then used to file fake tax returns.

“These email schemes continue to evolve and can fool even the most cautious person. Email messages can look like they come from the IRS or others in the tax community,” Koskinen said in a February statement. “Taxpayers should avoid opening surprise emails or clicking on web links claiming to be from the IRS. Don’t be fooled by unexpected emails about big refunds, tax bills or requesting personal information. That’s not how the IRS communicates with taxpayers.”

The sites can also carry malware, which can be used to infect a computer and install software on the machine, including key loggers that track keystrokes to obtain personal information.

The IRS also recommends watching out for advertisements and pop-up ads that appear to be reputable. It’s recommended that people never download anything from a “security” pop-up, which may tell the user that their computer is infected with a virus and will offer up malicious software to “fix” the problem. Reputable security software companies don’t use that method of advertising, according to the IRS.

These scams can be reported to phishing@irs.gov.

AARP cautions taxpayers about keeping personal information somewhere that is easily accessible. Don’t write down bank account numbers and keep them in a wallet. Don’t carry a Social Security card in a purse. Don’t store important, private data on a smartphone.

Don’t enter personal data haphazardly online, either. According to the IRS, online shopping should only be carried out on websites that use encryption to protect data. If a website is encrypted, “https” will be at the beginning of the web address.

The IRS also recommends utilizing long, secure passwords. Passwords should be at least 10 characters long, although 12 is better. Mix numbers, letters and special characters and avoid using predictable things such as names, birth dates or the word “password.”

Use different passwords from one account to the next. That way, if one password is stolen some accounts will stay secure.

AARP also warns against the “IRS impostor scam.” In this scam, a criminal impersonates an IRS agent over the phone. They’ll call and tell an individual that they’re in serious trouble for nonpayment, threaten police action and demand money immediately.

It’s important to remember that IRS representatives don’t call demanding immediate payment nor do they threaten arrest.