Tax Season Scams on the Rise


April 15th seems far away, but scammers are working overtime to beat you to the tax filing deadline so they can steal your money.  One of the new reported trends involves ransomware attacks on tax preparers.  They force tax preparers to pay a fee to ‘release’ their files then use the stolen client information to file false tax returns.  For this scam to work, they need to file before you do; otherwise, the IRS will automatically kick out the tax return.  So, starting now, you need to be on the alert for anything that does not look or seem right.  Here’s a quick walk down the cautionary road:

  • Big red flag. As mentioned above, if you e-file and your return is rejected, a scammer may have filed ahead of you.  It’s also possible you could have made a simple mistake, such as not using your name as it matches up with IRS records. Be sure to follow up quickly on the reason for rejection and take the appropriate action.
  • Someone very official-sounding/looking asks for personal information such as your Social Security number. The SS number is a critical piece of information for filing fraudulent tax returns.  Scammers will approach potential victims from multiple angles, including phishing emails, phone calls, official-looking letters or what appears to be a communication directly from your tax preparer.   Some scammers have even gone so far as to design official-looking government web sites.  Never give out any personal information, especially your SS number, unless you know whom you are giving it.
  • A heightened alert for business owners and employees. Scammers have been targeting payroll offices and HR departments requesting confirmation of W2 information for employees. Likewise, phishing emails also target employees disguised as communications from the payroll or HR department.  Never open a suspicious email attachment without confirming the sender is legitimate.
  • Scammers are targeting bank customers. This typically comes in the form of a phishing email, maybe from their security department, and asking to confirm your user ID.  Sometimes, to give a sense of urgency, it will state your account is frozen until you resolve the matter.  Pick up the phone and call your bank instead of being coaxed into an email response.

Some scammers leave numbers to call, and they are ready to have a persuasive conversation to trick you into giving money or releasing vital information. Just remember, if it doesn’t feel right, pay attention to that feeling and step back from the conversation. You just may be protecting yourself.

Follow The Welch Group every Tuesday morning on WBRC Fox 6 for the Money Tuesday segment.


Tax Season Scams on the Rise

  • Fraudulent tax returns
  • Stealing your Social Security number
  • W2 attacks
  • Bank customer attacks 

Stewart H. Welch, III, CFP, AEP, is the founder of THE WELCH GROUP, LLC, which specializes in providing fee-only investment management and financial advice to families throughout the United States. He is the author or co-author of six books, including  J.K. Lasser’s New Rules for Estate, Retirement and Tax Planning- 6th Edition (John Wiley & Sons, Inc.); THINK Like a Self-Made Millionaire; and 100 Tips for Creating a Champagne Retirement on a Shoestring Budget. More information about The Welch Group and important Disclosures can be found on our website. Investing in securities involves the risk of loss. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy will be profitable or equal any historical performance level(s). Consult your financial advisor before acting on comments in this article.