The U.S. Internal Revenue Service (IRS) said this week that beginning in 2021 it will allow all taxpayers to apply for an identity protection personal identification number (IP PIN), a single-use code designed to block identity thieves from falsely claiming a tax refund in your name. Currently, IP PINs are issued only to those who fill out an ID theft affidavit, or to taxpayers who’ve experienced tax refund fraud in previous years.
The U.S. federal government is now in the process of sending Economic Impact Payments by direct deposit to millions of Americans. Most who are eligible for payments can expect to have funds direct-deposited into the same bank accounts listed on previous years’ tax filings sometime next week. Today, the Internal Revenue Service (IRS) stood up a site to collect bank account information from the many Americans who don’t usually file a tax return. The question is, will those non-filers have a chance to claim their payments before fraudsters do?
In May 2013, the U.S. Justice Department seized Liberty Reserve, alleging the virtual currency service acted as a $6 billion financial hub for the cybercrime world. Prompted by assurances that the government would one day afford Liberty Reserve users a chance to reclaim any funds seized as part of the takedown, KrebsOnSecurity filed a claim shortly thereafter to see if and when this process might take place. This week, an investigator with the U.S. Internal Revenue service finally got in touch to discuss my claim.
The Internal Revenue Service has been urging tax preparation firms to step up their cybersecurity efforts this year, warning that identity thieves and hackers increasingly are targeting certified public accountants (CPAs) in a bid to siphon oodles of sensitive personal and financial data on taxpayers. This is the story of a CPA in New Jersey whose compromise by malware led to identity theft and phony tax refund requests filed on behalf of his clients.
Identity thieves who specialize in tax refund fraud have been busy of late hacking online accounts at multiple tax preparation firms, using them to file phony refund requests. Once the Internal Revenue Service processes the return and deposits money into bank accounts of the hacked firms’ clients, the crooks contact those clients posing as a collection agency and demand that the money be “returned.”
In one version of the scam, criminals are pretending to be debt collection agency officials acting on behalf of the IRS. They’ll call taxpayers who’ve had fraudulent tax refunds deposited into their bank accounts, claim the refund was deposited in error, and threaten recipients with criminal charges if they fail to forward the money to the collection agency.
This is exactly what happened to a number of customers at a half dozen banks in Oklahoma earlier this month. Elaine Dodd, executive vice president of the fraud division at the Oklahoma Bankers Association, said many financial institutions in the Oklahoma City area had “a good number of customers” who had large sums deposited into their bank accounts at the same time.
Today, Jan. 29, is officially the first day of the 2018 tax-filing season, also known as the day that fraudsters start requesting phony tax refunds in the names of identity theft victims. Want to minimize the chances of getting hit by tax refund fraud this year? File your taxes before the bad guys can!
Tax refund fraud affects hundreds of thousands, if not millions, of U.S. citizens annually. Victims usually first learn of the crime after having their returns rejected because scammers beat them to it. Even those who are not required to file a return can be victims of refund fraud, as can those who are not actually due a refund from the IRS.
KrebsOnSecurity has long warned readers to plant your own flag at the my Social Security online portal of the U.S. Social Security Administration (SSA) — even if you are not yet drawing benefits from the agency — because identity thieves have been registering accounts in peoples’ names and siphoning retirement and/or disability funds. This is the story of a Midwest couple that took all the right precautions and still got hit by ID thieves who impersonated them to the SSA directly over the phone.
In mid-December 2017 this author heard from Ed Eckenstein, a longtime reader in Oklahoma whose wife Ruth had just received a snail mail letter from the SSA about successfully applying to withdraw benefits. The letter confirmed she’d requested a one-time transfer of more than $11,000 from her SSA account. The couple said they were perplexed because both previously had taken my advice and registered accounts with MySocialSecurity, even though Ruth had not yet chosen to start receiving SSA benefits.
KrebsOnSecurity has sought to call attention to online services which expose sensitive consumer data if the user knows a handful of static details about a person that are broadly for sale in the cybercrime underground, such as name, date of birth, and Social Security Number. Perhaps the most eye-opening example of this is on display at fafsa.ed.gov, the Web site set up by the U.S. Department of Education for anyone interested in applying for federal student financial aid.
Maybe you’ve been feeling left out because you weren’t among the lucky few hundred million or billion who had their personal information stolen in either the Equifax or Yahoo! breaches. Well buck up, camper: Both companies took steps to make you feel better today.
Yahoo! announced that, our bad!: It wasn’t just one billion users who had their account information filched in its record-breaking 2013 data breach. It was more like three billion (read: all) users. Meanwhile, big three credit bureau Equifax added 2.5 million more victims to its roster of 143 million Americans who had their Social Security numbers and other personal data filched in a breach earlier this year. At the same time, Equifax’s erstwhile CEO informed Congress that the breach was the result of even more bone-headed security than was first disclosed.
To those still feeling left out by either company after this spate of news, I have only one thing to say (although I feel a bit like a broken record in repeating this): Assume you’re compromised, and take steps accordingly.
In March 2017, KrebsOnSecurity warned that thieves who perpetrate tax refund fraud with the U.S. Internal Revenue Service were leveraging a widely-used online student loan tool to find critical data on consumers that allows them to claim huge refunds with the IRS in someone else’s name. This week, it emerged that a Louisiana-based private investigator is being charged with using the same online tool to glean tax data on then-presidential candidate Donald J. Trump.
A story today at Diverseeducation.com points to court filings in the U.S. District Court for the Middle District of Louisiana, in which local private eye Jordan Hamlett is accused by federal prosecutors of abusing an automated tool at the U.S. Department of Education website that is designed to make it easier for families to complete the Education Department’s Free Application for Federal Student Aid (FAFSA) — a lengthy form that serves as the starting point for students seeking federal financial assistance to pay for college or career school.