March 29, 2018
Every year around this time, the Canada Revenue Agency (CRA)) warns consumers about tax fraud – and it’s no different this tax season.
In the U.S., about 16.7 million consumers were victims of identity fraud in 2017 with the amount stolen rising to $16.8 billion, according to a Javelin Report.
Tax fraud is widespread because cyber criminals only need a name, date of birth, and Social Insurance number to file a fraudulent tax return.
This year, experts also point to the 2017 Equifax data breach, which affected up to 143 million people in the U.S., Canada, and Britain. Social Security numbers were among the data exposed, and criminals may use them to file fraudulent tax returns.
Filing taxes early may reduce the risk of becoming a victim of identity theft-related tax fraud. When you file first, an identity thief who has stolen your ID can't file and claim the tax refund too.
At tax time, unsolicited phishing emails, texts, and social media posts will arrive from ‘fake’ CRA agents requesting personal and financial information. One scam to watch for: after a criminal steals personal data, files a return, and has the refund sent to you (direct deposit or a check), he contacts you claiming to be from the CRA or a collection agency and says the refund was a CRA error and it should be returned immediately. Watch for direct deposits or checks in the mail you weren't expecting and contact the CRA if it occurs. Also, don’t respond to these requests. The CRA would never initiate contact with taxpayers via email this way.
Fraudsters impersonate CRA agents by phone too, demanding that a taxpayer pay a (false) tax bill immediately over the phone – or be arrested, deported and suffer another penalty. If you receive a call, hang up and contact the CRA directly.
More than half of U.S. taxpayers have someone else prepare their tax return – but ‘return 'preparer' fraud’ is also on the Dirty Dozen list of tax scams. What happens is criminals will set up a temporary tax return service shop to commit refund fraud. Always check the credentials of your tax person. Avoid anyone whose fee is based on a percentage of the refund, or who immediately promises a refund
Some workplace phishing scams target payroll or HR in an attempt to get employee tax forms and other information. Cyber criminals often do this by posing as an executive in a company in an email, for example, and requesting copies of the tax forms. The corporate data security policy should address workplace processes for protecting confidential data.
Before, during and after tax season protect your confidential information and credentials. Securely destroy personal information on paper and on hard drives, when it is no longer needed.