Don’t Take the Bait: Protect Your Taxpayer Information

The Internal Revenue Service and Security Summit Partners have been working to better understand the various phishing, spear phishing, clone phishing and whaling scams that are aimed at obtaining sensitive personal identifiable information. As you may well know, phishing and related scams can expose taxpayers to legal, financial, and identity risks that can have long-term consequences. This is not just an IT-issue, this is a serious legal and financial vulnerability that demands attention. As the financial landscape grows more complex, so do tax compliance and reporting obligations – placing even greater responsibility on taxpayers to safeguard their personal and financial data. Now more than ever, taxpayers must remain vigilant about how they communicate electronically and which platforms they use to share sensitive information with their financial advisor, CPA or local tax attorney.

Examples of such phishing, spear phishing, clone phishing and whaling scams can include smishing text messages or emails with suspicious links, emails that are targeted, realistic-looking and crafted to deceive recipient with a link, sending emails from known senders where the email address is very similar to one sent by a frequent sender with a link, emails that are targeting executives, HR, payroll/accounting heads or financial officers, and recently, emails sent from “potential new client” with attachments or links.

Taxpayers can use a combination of behavioral awareness and secure tools that include the use of encrypted portals for document sharing such as Dropbox, ShareFile, Citrix, NetClient CS, Liscio or your tax professional’s secure portal. Another option would be to use two-factor authentication (“2FA”) on all financial platforms such as online banking, tax software, and email. Use of password management software such as Keeper, LastPass, NordPass, etc. and use of strong passwords that are updated every 60-90 days can help with managing your credentials safely. Taxpayers can also create an online IRS account to monitor tax transcripts, refund status, and any suspicious activity to detect vulnerabilities sooner.

Ultimately, your best defense is using the verification method and looking at who sent the email, reviewing the sender’s email address, context of message, etc. If you receive an email that is a tax-related request which seems suspicious, you can forward the email to phishing@irs.gov and notify your financial advisor, CPA or local tax attorney immediately for security purposes.

We highly recommend protecting your digital footprint with the same caution you would your financial statements. Prevention now can save you or your business from serious legal and financial headaches later.

If you have any questions regarding your individual or businesses’ state and/or federal tax return(s)/tax liabilities or received a notice from the IRS, FTB, EDD, CDTFA or any other regulatory agency, please call or email Wilson Tax Law Group, APLC, to setup a consultation with our firm.

Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense.  Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board.  Wilson Tax Law Group, APLC, is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.

For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC

Tel: (949) 397-2292 (Newport Beach Office) 

Tel: (714) 463-4430 (Yorba Linda Office)

Disclaimer: This blog post is for informational purposes only and does not constitute legal, tax or financial advice. Please consult with a qualified attorney, accountant or financial advisor for specific guidance related to your circumstances.