The Better Business Bureau has some suggestions for consumers and business owners for keeping their tax information secure and avoiding tax-related scams.
In 2019, BBB processed approximately 2,260 complaints against tax return preparation services and related businesses (including accountants preparing tax returns). For those complaints, the median disputed amount for which consumers sought BBB’s help was $495.
In 2019, BBB Scam Tracker received approximately 600 reports from consumers regarding con artists claiming to be with the IRS. This comprised nearly 2% of all Scam Tracker reports received in 2019, dropping from 3,500 or 7% of scams in 2017. These scams tend to rely on tactics such as intimidation (i.e. threats of arrest), isolation (to keep victims from talking to their family members about the supposed tax issue) and/or pressure to act quickly. Tax collection scams often employ all three to bully their targets into compliance.
BBB has been cooperating with the IRS by providing the agency with phone numbers reported from consumers to BBB Scam Tracker. Any law enforcement agency can request additional information from Scam Tracker, and we are always willing to work with them to help stop this fraud.
Here are some ways consumers and business owners can combat tax fraud:
• Only deal with trustworthy tax preparation services. Check BBB.org for the latest Business Profile before you engage a company for the first time.
• If you get tax information delivered electronically from your employer or other entity, treat that information carefully. Download it onto a password-protected computer. Be on guard for “red flags,” such as phone calls, before you’ve received any letter from the Internal Revenue Service or other tax authority, demands for immediate payment, threats or intimidation or payment requests via wire transfer, prepaid debit card or gift card.
• Guard your passwords. The IRS tells us identify theft and other scams tend to succeed because people many times use the same login passwords for all their accounts. Create new strong, unique passwords for each of your accounts. Include a combination of upper and lower-case letters, numbers and special characters and make passwords at least 10 characters long. Be sure to change your login and passwords often. To keep track of all your different passwords and logins, it may be helpful to utilize software, such as Password Safe or Keeper Password Manager, which can automatically generate strong passwords and securely store them for you.
• Protect your computer. Restrict unauthorized access to your computer by password-protecting sensitive data. Consider encrypting important files. For example, use PDF encryption software to secure PDF copies of your tax returns. Encrypting these files protects your data if someone steals your computer or otherwise gains unauthorized access. Other proactive steps include:
• Keep confidential files in a folder that cannot be shared.
• Remove your hard drive from your computer before selling or disposing of it.
• Install antivirus software on your computer.
• Regularly run malware checks.
• Protect personally identifiable information such as birth date, Social Security numbers, bank accounts, etc.
• Check out any tax-related websites you are considering carefully and make sure you are accessing the real IRS website (irs.gov) when filing your taxes electronically or inquiring for additional information. Send such information only through fully encrypted websites. The URL address for every page on the site should start with “https.”
Taxes are scary enough. Don’t be a victim. You can file a complaint against a business at BBB.org/Complaint. You can also file a scam report about a fraud (even if you lost no money) at BBB.org/ScamTracker
Cheryl Parson is president of the Better Business bureau serving West Central Ohio. The BBB may be found on the Internet at www.lima.bbb.org.