Tax season isn’t just a stressful time for taxpayers, it’s a playground for cyber criminals. As millions of Americans switch to online filing and rapidly exchange sensitive financial data, scammers seize this opportunity to launch sophisticated attacks aimed at stealing identities, intercepting refunds, and committing fraud. In today’s digital landscape, understanding these threats is critical to protecting your personal and business finances.
Why Tax Season Is a Cyber Criminal’s Dream
During tax season, urgency and high volumes of sensitive information create a perfect storm for fraudsters. Here’s why cyber criminals love this time of year:
- Increased Digital Activity: With over 90% of tax returns now filed online, a vast amount of personal, financial, and tax data is transmitted across digital channels. This flood of data offers an attractive target for attackers looking to harvest credentials and sensitive information.
- Time Pressure and Anxiety: Taxpayers are often anxious about deadlines and potential mistakes. Scammers exploit this urgency by sending “urgent” messages that pressure individuals into acting without verifying the details.
- Complexity of Tax Filing: The intricate nature of tax forms and the involvement of third-party tax preparers (both legitimate and fraudulent) create multiple points of vulnerability that cyber criminals can manipulate.
According to Microsoft Threat Intelligence, the tax season has become a key period for spearphishing campaigns that specifically target taxpayers and even tax professionals by disguising malicious messages as official tax communications. (Microsoft)
Common Cyber Threats Targeting Taxpayers
Phishing and Spearphishing Attacks
Phishing remains the most common tactic used during tax season. Fraudsters send emails or texts that mimic official IRS notices or communications from well-known tax software providers. These messages often contain urgent language—for example, claims that your tax return has an error or that you’re due a large refund—which prompts you to click a link or download an attachment. Once clicked, these links may lead to counterfeit websites designed to capture your login credentials or install malware on your device.
A recent Investopedia report noted that scammers are using increasingly sophisticated techniques, including artificial intelligence to craft phishing emails that are nearly indistinguishable from legitimate IRS communications. (Bird)
IRS Impersonation Scams
Scammers frequently impersonate IRS agents to trick taxpayers into disclosing personal information or making immediate payments. The IRS has repeatedly warned that it will never initiate contact via email, text, or phone to demand personal or financial information. Yet, fraudsters continue to exploit this misconception, using caller ID spoofing and fake websites to convince victims that they owe back taxes or are eligible for an unexpected refund. These impersonation scams have resulted in millions of dollars in losses, with many victims only realizing the breach after their refunds have been diverted.
Ghost Preparer Schemes
Another growing threat involves “ghost preparers”—fraudsters who pose as tax professionals. They offer to file your tax return for a fee but lack proper credentials. A key red flag is when a preparer refuses to sign your return or doesn’t provide a valid Preparer Tax Identification Number (PTIN). Such practices not only jeopardize your refund but can also expose you to identity theft and long-term financial complications. The IRS advises taxpayers to verify credentials before handing over sensitive documents. (Qureshi)
Ransomware and Data Breaches
Cyber criminals sometimes use ransomware to lock down networks during tax season. By encrypting files and demanding payment for their release, attackers can disrupt the operations of tax firms, businesses, and even individual taxpayers. The high volume of transactions during this period makes it easier for attackers to mask their activities and potentially compromise large datasets containing personal tax records.
Eye-Opening Data on Tax-Related Cyber Incidents
The statistics speak for themselves:
- Billion-Dollar Fraud: In 2024, the IRS uncovered over $9.1 billion in tax fraud cases—an eye-opening figure that underscores the scale of the threat during tax season (Bird)
- Dirty Dozen Campaign: The IRS’s annual “Dirty Dozen” campaign highlights 12 common scams targeting taxpayers, many of which are spearphishing-based. These scams have become more prevalent each year as fraudsters refine their tactics. (IRS)
- Targeted Attacks on Tax Professionals: Not only are individual taxpayers at risk—cyber criminals also target tax preparers to gain access to multiple clients’ sensitive information. A single breach of a tax professional’s credentials can potentially affect hundreds or even thousands of taxpayers.
How to Protect Yourself This Tax Season
While the cyber threat landscape may seem daunting, you can take several proactive measures to protect your personal and financial data:
- File Early and Securely: Submit your tax return as early as possible to reduce the risk of someone fraudulently filing a return in your name. Use only official IRS portals or trusted tax software with strong encryption (look for “https://” in the URL).
- Enable Multi-Factor Authentication (MFA): Add an extra layer of security to your email and tax-related accounts. MFA makes it significantly harder for cyber criminals to access your accounts, even if they manage to obtain your password.
- Be Wary of Unsolicited Communications: The IRS will never contact you by email, text, or phone to demand personal or financial information. If you receive an unexpected message that creates a sense of urgency or threatens legal action, verify its authenticity by calling the IRS directly at their official number.
- Educate Yourself and Your Employees: If you’re a business owner or tax professional, conduct regular cybersecurity training. Teach your staff how to identify phishing attempts, verify sender details, and avoid clicking on suspicious links or attachments.
- Regularly Monitor Your Accounts: Frequently check your bank statements and credit reports for any unauthorized activity. Early detection of fraud can mitigate potential damage.
- Work with Reputable Tax Professionals: Ensure that any tax preparers you use are properly certified and have a valid PTIN. If something feels off, don’t hesitate to ask for credentials or seek a second opinion.
The Bottom Line
As tax season approaches, cyber criminals are gearing up to exploit the chaos and urgency inherent in this period. With billions of dollars in fraud already uncovered, the risk is real and growing. By staying informed, practicing vigilant cybersecurity habits, and taking proactive steps to secure your data, you can significantly reduce your risk of falling victim to these scams.
Remember, your tax data is too valuable to leave unprotected. Let’s make sure the only thing you’re filing this season is a successful tax return – not a cybersecurity incident report. Start with a FREE Network Assessment to uncover potential vulnerabilities and ensure your systems are ready to handle whatever comes your way.
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Stay safe and file smart this tax season!
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