The spring sprint is on: Con artists are racing to defraud income taxpayers ahead of April's filing deadline, and the Internal Revenue Service is scrambling to stay one step ahead.
The taxpayer identity-theft problem exploded between 2010 and 2012 and is still growing. But this year, Americans using "tax software may have noticed there were new sign-in requirements to access your account," IRS Commissioner John Koskinen said Thursday at a National Press Club luncheon.
Those extra safeguards, along with efforts to educate taxpayers about scams, have helped the IRS beat back thieves trying to defraud individuals.
Unfortunately, the scammers are changing up their game too. "Cybercriminals are becoming increasingly sophisticated," Koskinen said. "They continually find new methods of stealing personal information."
For example, instead of just trying to trick the elderly or intimidate the young into giving out personal information, the criminals are sending email spoofs to professionals working in corporate human-resources departments. The phony messages appear to come from the boss, requesting W-2 information about employees.
When the HR workers fall for it, they hand over Social Security numbers and other information. That allows the criminals to file bogus tax returns and get refunds deposited into the fraudsters' bank accounts, Koskinen said.
Identity theft has risen along with the shift to electronic filing. About 93 percent of taxpayers file on line these days, and nearly half are do-it-yourselfers who file without help from tax professionals.
The average tax refund is just over $3,000. So to steal that cash, thieves try to get their victims to click on fake IRS websites or give out important information over the phone. That allows the crooks to take on a taxpayer's identity and redirect a refund into their own accounts. Or they intimidate victims into paying taxes "owed" to the IRS, threatening jail time or lawsuits if the taxpayers don't pony up via prepaid debit cards, money orders or wire transfers.
Treasury Inspector General for Tax Administration J. Russell George says that government anti-fraud efforts, such as working with telephone companies to shut down scammers' phone numbers, are increasingly effective. "Where the perpetrators used to be able to get a victim every 40-50 calls, now they must make 300-400 attempts to claim a victim," he said.
Still, Treasury Secretary Jacob Lew recently told Congress that the "cyber-security protections necessary to protect taxpayer data" have been left "severely underfunded" in the latest federal budget.
For more information about how to avoid or report scams, go to these legitimate websites: advice from the Treasury Department Inspector General; the I.G.'s form for reporting a scam; and the Federal Trade Commission.
To check the status of your refund, go to the "Where's My Refund?" tool on the IRS website.
P.S. – This year, the filing deadline is not the usual April 15. That date, a Friday, is Emancipation Day in the District of Columbia. So the IRS pushed the deadline for filing a return to Monday, April 18, in most of the country. But there are two exceptions: In Maine and Massachusetts, April 18 is Patriot's Day, so taxpayers there have until April 19.