Introduction

As the calendar flips to the beginning of tax season, marked by the Internal Revenue Service (IRS) starting to accept and process 2023 federal income tax returns on January 29, individuals and tax professionals brace for the influx of phishing scams. With over 146 million individual tax returns expected to be filed, the period until the April 15 deadline is ripe for cybercriminals looking to exploit the massive movement of sensitive information.

The Rise of Sophisticated Phishing Scams

In an era of ubiquitous digital communication, scammers have become increasingly sophisticated in their attempts to deceive. One of the more audacious strategies involves impersonating reputable companies, with a notable example being fraudsters posing as a tax software company named Drake. This scam, however, targets tax professionals and Certified Public Accountants (CPAs) rather than the general taxpayer, seeking to pilfer electronic filing identification numbers—a key component in the tax return process.

IRS’s “Dirty Dozen” List and Tax Scams

The IRS annually compiles a “Dirty Dozen” list, highlighting the most outrageous scams taxpayers and professionals may face. Among the top concerns for 2023 are phishing scams, which can manifest through bogus emails and texts, often masquerading under the guise of legitimate entities by utilizing the IRS logo or similar authoritative symbols. The IRS emphasizes its standard protocol of initiating most contacts through regular mail, starkly contrasting the methods employed by scammers who favor emails, texts, or social media.

The Target on Tax Professionals

Tax professionals find themselves at a heightened risk, as scammers aim to capture not just personal data but also sensitive access credentials to e-Service accounts and electronic filing identification numbers. The IRS warns that these phishing attempts may appear remarkably sophisticated, with scammers posing as potential new clients, the IRS itself, state tax agencies, or even financial institutions.

Cybersecurity Measures and Best Practices

The IRS underscores the critical importance of robust cybersecurity practices, such as employing strong passwords and exercising caution with suspicious emails or links. The agency has observed a worrying trend of phishing emails purporting to be from “new clients,” making it imperative for tax professionals to scrutinize unsolicited emails meticulously.

Broad Spectrum of Phishing Threats

Beyond the professional sphere, individual taxpayers are also under siege from a broad spectrum of phishing scams. These include, but are not limited to, impersonations of government agencies beyond the IRS, such as the Consumer Financial Protection Bureau, which reported scammers using its name in fraudulent schemes.

Defensive Strategies Against Scams

The cornerstone of defense against these scams lies in heightened vigilance and a critical approach to unexpected communications. This includes:

• Verifying the identity of the sender through independent means, rather than relying on contact information provided in a suspicious email or text.
• Exercising patience and skepticism with requests for updates or personal information, especially when such requests come unexpectedly.
• Being especially wary during tax season, a time when individuals and professionals alike are particularly vulnerable due to the high volume of sensitive information being processed.
• Wherever possible, enable Multi-Factor Authentication (MFA) on all accounts, especially those related to financial and tax filing processes. MFA adds an additional layer of security, making it significantly more difficult for unauthorized users to gain access even if they have your password.
• Ensure your email account has strong security settings and regularly monitor account activity for signs of unauthorized access. Be cautious about the information you share over email, and consider using encrypted email services for sensitive communications.
• Both individuals and organizations should invest in regular training on recognizing phishing emails and scams. Understanding the latest tactics used by scammers, including how they mimic legitimate organizations, can significantly reduce the risk of falling victim to a scam.
• Use comprehensive security software that includes antivirus, anti-malware, and email filtering capabilities. This software can detect and block malicious emails and attachments before they reach your inbox.
• Reporting attempted scams to the IRS and sharing information about new phishing tactics with colleagues and networks can help raise awareness and prevent others from falling victim.

By integrating these strategies into your defensive arsenal, you can significantly enhance your protection against the sophisticated and ever-evolving phishing scams that proliferate during tax season.

Conclusion

The tax season, while a routine part of the financial year, brings with it an increased threat from phishing scams aimed at both taxpayers and tax professionals. Awareness, caution, and proactive cybersecurity measures form the triad of defense against these ever-evolving threats. By adhering to these practices, and by remaining skeptical of unsolicited requests for information or action, we can safeguard our personal and financial information against the machinations of cybercriminals.