Category Archives: Tax Season

Tax Season 2018 – The IRS is Checking Your Facebook Page

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There are lot of ways that the IRS can figure out your income. In addition to your W-2 and 1099 the IRS also receives information from your bank and other financial institutions and your credit card company. 

According to Debt.com if something is not adding up then your information gets red flagged by a system called the Information Returns Processing system (IRP). This massive database can review  and compare your reported income against information from other third party sources. If there is a discrepancy the IRS is alerted for further investigation. Every year the IRS estimates the U.S. government misses out on hundreds of billions of tax dollars due to unreported income. With advances in technology they hope to collect at least some of that missing tax revenue. But did you know they gather information from Facebook, Twitter and your email?

Uncle Sam is checking Facebook.

People who love to post personal information to Facebook or Tweet may want to pay attention. These are rich sources of information and the IRS knows it. With all those billions going uncollected every year the IRS has stepped up its game and is now checking your social media accounts.  

The IRS started checking Facebook and Twitter pages in 2013 in order to gather information that could support a taxpayer audit. The IRS initially denied these reports.

In an interview with Inc.com Kevin P. McQuillan of  The McQuillan Group said the IRS has been quiet about checking social media. “When the IRS first mentioned utilizing social media, it created quite a stir, and in response to that, they came out and were very specific to say that they weren’t going to use emails without some authorization. However, they didn’t say anything about social media. The IRS has always had access to public information, such as what car you own, or what house you live in. In the past auditors have used the audit process to decide what information they will look into on a particular case. However, given recent cuts to the agency and the decreased number of auditors, they are now coming to audits with this information in hand.”

The IRS is using your Facebook posts to determine if you are lying to them about income or tax issues. For example did a businessman write off a family vacation as a business trip? Or is an employer spending lavishly while claiming his business is currently unprofitable? Its called over sharing and people do it all the time. The IRS is using online activity trackers to scan massive amounts of public Internet data for potentially incriminating information.

Businesses are not immune from the social media snooping by the IRS. If your company webpage shows off new equipment, vehicles, lavish parties or expounds on your growing business while at the same time being behind on payroll taxes or suspiciously claiming beneficial business write-offs you may have some questions to answer. Keep in mind that your employees may be sharing company information on Facebook or Twitter that reflects the state of your company’s finances. Historically the IRS has used tax returns to audit businesses.  Social media scanning shows that they are now becoming more sophisticated with its investigative tools. Be careful about over sharing on public and private platforms to avoid an nasty letter from Uncle Sam.

Is email private?

You’re thinking your emails are private right? The answer is probably not. In a 2017 report  Washington State University professors issued a report  on IRS data mining, The Use of Big Data Analytics by the IRS: Efficient Solutions or the End of Privacy as We Know It?,  found the IRS was reading taxpayer private emails without a warrant. According to the Electronic Communications Privacy Act (ECPA), IRS investigators can read everything in your email account except unopened emails or voicemails saved for 180 days or less. According to the report the 2011 IRS auditor’s training manual told investigators exactly how to do it. The IRS stopped this practice in response to a Senate Finance Committee request. However, the ECPA law has not been changed. So effectively the IRS has not broken the law nor is not barred from doing this again.

Now you know.

 

 

Tax Season 2017 – Talk to Parents and Grandparents About Tax Scams

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Tax season is scam season. It is also a good time to talk to elderly people about their tax returns. In the age of the Internet, email and smartphones older people to get confused and even intimidated by the technology. And scam artists know this.

For elderly African-Americans information security is a key concept they need to understand. Something as simple a securing sensitive papers can make a great deal of difference. African-American seniors need to understand that simple documents such as a utility bill can lead to identity theft. These are new concepts for many older people.

Some elderly people live in senior citizens homes or assisted living facilities. Others have in home care. These older people, because of their situation, are vulnerable. If you have a parent, grandparent or elderly reative in this situation make sure mail and other documents are properly secured. Live-in or visiting caregivers are supposed to be trusted but we know that is not always the case.

Makes sure they understand that they are not to give any information over the phone. Fake IRS scam artists are very skilled at intimidating and confusing older people on the phone. Make sure they know to hang up the phone immediately. Remember, some calls are phishing calls. This is where the caller asks question to get information that is just the beginning of the scam. They use methods known as social engineering. Older people are vulnerable because they may fall for a friendly voice on the other end asking seemingly innocent questions. Other times they may think they are talking to the IRS.  Again, remind them never give informaion over the phone.

Ask questions; who is preparing their taxes? Is this a legitimate company? Can they be trusted? How is their information handled and secured? How much are they charging? All these question maybe intrusive but if you feel your parents or grandparents are vulnerable then its better to be an nuisance now than to regret it later.

Some older people do indeed use the Internet to shop, send email and conduct other business. Make sure they understand that the IRS does not conduct business by email. Teach them to avoid clicking on links or opening attachments.

Finally, persuade older people to ask for help. Many older people guard their independence jealously. They want to feel they are in control of their own lives. Make sure they know you are there to help them and protect them.

 

Tax Season 2017 -Who’s Doing Your Taxes?

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Courtesy of Stuart Miles

Tax season is scam season and the cyber crooks are trying every possible trick to get your money. African-Americans, people of color, senior citizens and immigrants are especially targeted. Why? Because we are not educating ourselves. Tax scams targeting black people in the past included a scheme for slavery reparations. Immigrants are vulnerable because they do not always understand the American tax system and can be easily intimidated with threats of deportation. Seniors are also easily threatened. According to a study by Home Instead Senior Care nearly one in 10 seniors reported being victimized by a phone scam. These scams usually involve someone posing as an IRS official demanding immediate payment of taxes.

Scams, phishing attacks and social engineering are the most common tools used to rip people off. So what can you do? First of all be aware of how the IRS works. Second, be aware of how the crooks work. Simply put, educate yourself. The AACR is here to help

Lets talk about tax preparers. If someone else is doing your taxes there is a a way to find out if this person is legitimate. Check the IRS tax preparer directory. You can search for a tax professional or discover if you are dealing with a crook.

Anyone can claim to be a tax preparer. Only four states have mandated requirements for tax professionals, California, Maryland, New York and Oregon. In all the other states anyone can claim to be a tax preparer and charge for their services. There is no standard or requirement to meet any minimum educational competency or training.

Here are a few tips to spot them.

  • All paid tax preparers are required to have a Preparer Tax Identification Number, or PTIN. The only way to get a PTIN is to register with the IRS.  And the PTIN should be included on your tax return. 
  • Don’t ever sign a partially completed tax return!  A legitimate tax professional will never ask you to do this regardless of how complicated your return may be.
  • Your tax preparer should ask for all documentation of your income. Be suspicious if you are not asked for your W-2 or other documentation of earnings, deductions or credits.
  •  Don’t ever agree to false documentation or deductions. Remember you are ultimately responsible for what is on you tax return. And fines, penalties and even prison is a definite possibility.
  • Your preparation fee should not be based on a percentage of your refund. This may cause a disreputable preparer to inflate deductions or credits.
  • Never pay your taxes or penalties to your preparer. These go directly to the IRS. If they don’t get there its on you.
  • Avoid any tax preparer who claims to have secret method to lower your tax bill that the IRS doesn’t want you to know about.
  • Be alert to all unprofessional behaviors like someone who does taxes from their home or have no set office.
  • Provide only copies of your documents. You keep the originals. 
  • Make sure your preparer is easy to contact and responds promptly.
  • If you spot any of these red flags report the preparer to the IRS using Form 14157. Also file a complaint at Fraud.org.

Tax season is scam season. Educate yourself to the scam, traps and tricks!

Tax Season 2017 – Fighting Identity Theft

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There are two seasons that cyber criminals celebrate; Christmas and tax season. African-Americans should understand that protecting themselves during this time is especially critical  A 2011 Federal Trade Commission national fraud survey revealed that African-Americans were almost twice as likely to be victims of fraud as whites.  African-Americans were victimized 17.3 percent of the time compared to 9 percent for whites.  For Hispanics 13.4 percent reported being fraud victims. To top off these disturbing numbers is the fact that black and minorities often don’t report fraud because of embarrasment.

Tax season used to be a multi-billion dollar hunting season for identity thieves. But the hunting may not be so good this year. Because of IRS work identity theft has plummeted by 46 percent.  376,000 fewer taxpayers had their identities stolen by criminals.

In the past two years the IRS, working with major tax preparers, started sharing information to improve tax payer security.  Congress has also given the IRS more tools to prevent criminals from getting fraudulent tax refunds. This allowed the IRS to identify and block over 1 million phony tax refunds last year. 

Federal authorities crushed a massive identity theft ring in Alabama and Georgia in 2015. Those thieves collected $10 million in fraudulent refunds. Cyber criminals are merciless. This scam even targeted veterans of the Afghanistan war being treated at Fort Benning’s hospital.

Last year another ring in the District of Columbia was taken down as they tried to steal more than $20 million in fraudulent tax refunds. The victims included people in assisted living facilities, drug addicts and prison inmates.

Technology deployed at the IRS in recent years identitfies potential fake tax returns. Now the IRS can flag dramatic differences in a taxpayer’s return from year to year for additional screening.

The earned income tax credit is a big target for identity thieves. The IRS was holding refunds until Feb. 15 for families claiming this credit. These credits provide payments to people who don’t make enough money to owe any federal income taxes. This makes them attractive to identity thieves.

Protect your personal nformation during tax season by following these steps.

  • File early, even if you owe. Filing  your return early prevents anyone who has stolen your information from filing a fradulent return. The IRS will only accept the first return even if the thief has your social securty number.
  • Encrypt your data. Encrypted data is secure even if your laptop is stolen. There  is plenty of free encryption software available. PC Magazine recently published The Best Encryption Software of 2017. And using it is not that hard. If you can create a password you can encrypt your data.
  • Buy a decent shredder. Destroy any document with any personal information, especially your Social Security number. Any small bit of information helps a cyber thief and they are not above going through your trash can. These thieves have been known to drive through neighborhoods picking up trash! Any personal papers that has your bank account or investment account information should be shredded before disposal.
  • Use strong passwords. Learn to construct powerful passowords that are easy to remember. And change them often.
  • Keep your computer software up to date. Use a good anti-virus/anti-malware. Some cyber thieves can install spyware on an unprotected computer and steal your information.
  • Be aware of phishing attacks. Phishing is when you recieve an email or call asking for information using very sneaky questions. This is a form of social engineering. Don’t respond or click on email attachments or links. Anybody calling claiming to be from your bank or the IRS should be hung up on and reported. Banks and the IRS don’t call asking for information. These callers can be insistent and even threatening. Just hang up and investigate on your on by calling the IRS or your bank. DON’T GIVE ANY INFORMATION OVER THE PHONE! And remember, if anyone calls asking for money you should be the one asking the questions.
  • The IRS does not ask for money NOW! The don’t ask for money to be tranferred via a payment card. They don’t ask for credit card or debit card information. The are not coming to your house to arrest you. If someone threatens you with anything like this they are thieves. If you get a suspicious email or phone call, do not respond. Immediately call the IRS Identity Protection Specialized Unit (IPSU) at 1-800-908-4490.
  • Is someone else preparing your taxes? Here what you need to be asking;
    • How will my data be stored?
    • Will it be encrypted?
    • What computer security software is used?
    • Who has access?
    • Have those with access been properly screened?
  • Do not transmit tax returns or sensitive personal data on public WiFi. That means Starbucks or the public library. This is prime hunting ground for cyber thieves. These hackers wait and watch wifi traffic for an unprotected computer. The can intercept and record your online activity stealing your information or even hijacking your computer.
  • Check you credit report at least annually. You can get all three free credit reports from AnnualCreditReport.com. Remember this is the only credit report website authorized by the federal government.

Don’t be a victim during this tax season. Be aware!

Tax Season 2016 – Who’s Doing Your Taxes?

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tax-form-1040-fbIf you are not doing your own taxes you better make damn sure the person you pay to do them knows what they are doing!  The tax payer is ultimately responsible for any false claims, evasion or mistakes and you could be looking at criminal charges. This is serious business.

Finding a good tax professional does not have to be hard. You just have to know who you are looking for and that they are fully qualified. There are plenty of well known and reputable companies.  But according to the Government Accounting Office (GAO) most tax mistakes are the result of hiring a tax professional. According to the GAO, taxes prepared by hired professionals had a higher estimated percent of errors, 60 percent, than those prepared by the the tax payer, 50 percent.

The really dangerous thing is that anybody can claim to be a tax preparer. To declare yourself a tax preparer all you need is $50 to buy a tax identification number from the IRS. You don’t need a CPA license or formal education. No questions asked.

So if you’re going to hire a pro you want to choose wisely and the IRS Preparer Directory is where you want to start. The IRS database of tax pros launched about a year ago and includes a listing of tax preparers who have voluntarily submitted their credentials. The database of enrolled agents complete at least 72 hours of tax education every three years. You can search the database here.

Understanding who is doing your taxes is key. You have several choices besides the enrolled agents.

  • Certified public accountants or CPAs are accountants who have qualified through state exams and met specific education and experience requirements for that title. The IRS also offers a list of certified electronic tax preparers. But keep  in mind that not all CPAs area tax professionals. You need to ask and check their credentials.
  • Tax lawyers and tax preparation companies like H&R Block.  Tax attorneys are best for handling complex tax disputes, corporate matters, and handling the tax returns of enormously wealthy people. Unless you have a few million you should be ok with a tax prep company.

But be warned that tax prep companies like H&R Block or Jackson Hewitt and Walmart are designed to complete as many tax returns as quickly as possible. These companies use people who have limited training or are seasonal employees and quality control is suspect. A few years ago when the GAO went undercover to get returns done at these companies, nearly all of the returns were incorrect to some degree. If your tax return is wrong you are still responsible. Some will go with you if you are audited and some will even pay the penalty if there is one. But you are still responsible for any additional taxes or false claims.

One of the safest steps you can take when looking for a tax pro is to interview them. Check their reputation and background with the Better Business Bureau, make sure they have a tax preparer identification number (PTIN) for what it’s worth. Ask;

  • What professional organizations does the preparer belong to?
  • How long have they been doing tax returns?
  • Ask about their educational background.
  • Ask for references and call to find out if the preparer is reliable and professional.
  • Get contact information, address, phone number and email. Get business hours and an after hours contact number if possible. When and how can they be reached is vital. You don’t want someone disappearing with all your tax documents.?
  • Can  they be contacted after April 15th if necessary?
  • What are their rates and how are their fees calculated? For example do they charge by the hour or is there a flat rate per return? Are there additional charges for more complex returns?  You want to make sure you know how much you’ll be paying, including for any phone calls.
  • Do they offer other services such as estate or financial planning?
  • What records and receipts do you need from me? How are they transmitted and secured. Remember your life is in those papers!
  • What happens if my return is audited?
  • Do you offer electronic filing?

Word of mouth is the best advertising so check with friends, relatives, co-workers. Your employer may have a recommended tax preparer. You can find tax professional on places like Yelp, Angie’s List, The American Institute of Certified Public Accountants and National Association of Enrolled Agents website.

Other Tax Season 2016 articles from the African-American Cyber Report

IRS “Get Transcript” Got Hammered!

Tax Prep Apps of the Week

Claim Your Refund ASAP!

Hackers Attack IRS

Beware of Tax Scams

Tax Season 2016 – IRS “Get Transcript” Got Hammered!

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irs-seal-logoIn a devastating admission the IRS has announced the number of taxpayers PINs compromised has doubled again. In May of 2015 the IRS announced that there were 114,000 breached accounts. Then, in August, it added 390,00 to that number. Now the number sits at 724,000 breached accounts. The hackers were hard at work as the IRS also reported hackers unsuccessfully targeted an additional 295,000 taxpayer transcripts. Now the number of unsuccessful attempts is 570,000. 

Hackers are using the hacked accounts to file false tax returns and stealing tax refunds. Hundreds of millions of dollars have been stolen in this manner and the victims usually don’t know it until they file their return only to have them rejected.

The IRS has begun notifying the new victims and those whose accounts were attacked but not breached. IRS Commissioner John Koskinen said in a statement that “The IRS is committed to protecting taxpayers on multiple fronts against tax-related identity theft and these mailings are part of that effort. We are moving quickly to help these taxpayers.”

According to the IRS hackers were able to access people’s social security numbers and personal details through their website called “Get Transcript.” Get Transcript was launched in January 2014 on the IRS website. The application enabled taxpayers to view and download their transcript or order previous years of tax filing information.

According to the agency taxpayers used the ‘Get Transcript” tool to download about 23 million transcripts in its first few months of  2015 when it was introduced. The service supposedly used extensive security measures to thwart cyber criminals such as asking for Social Security numbers, addresses and birthdays.  The “Get Transcript” function was shut down in May of 2015.

In more sickening news Krebsonsecurity.com reported that the IRS’s attempts to protect last year’s tax fraud victims was also a total failure. Krebs reported that the IRS mailed 2.7 million of the six digit PINs to prior year tax identity theft victims. But the IRS also allowed taxpayers to retrieve their PIN from the IRS website. The same authentication procedures used by the identity thieves to file the fraudulent tax returns in the first place.

Hackers did not attack the IRS computer systems directly. According to experts the information that allowed the criminals to hack accounts came from online searches and social media accounts. Much of the personal information needed to answer security question can be found on sites like Facebook. Another indicator that sharing too much information can be very bad.

Jeff Markley, a tax technician with Burch & Associates Inc. in Lincoln, said, “The culprits already had information through various things. Through social media, you can Google yourself and find out all sorts of sensitive information, like your birth date.”

According to identity theft experts limiting the amount of information shared online is the best way to prevent becoming a victim of identity theft.  Also don’t click on attachments and links in an email unless you are certain of what they are. Don’t talk to people claiming to be the IRS over the phone. The IRS only contacts taxpayers via the mail.

The embarrassments for the IRS continue.  According to a recent report from the Online Trust Alliance six of 13 IRS approved tax preparation companies failed to provide adequate security to its customers. The companies are all members of the IRS’s Free File Alliance. This group provides free tax preparation and e-filing for an estimated 100 million federal tax returns. The Online Trust Alliance reported the following services failed an online security audit.

  1. 1040.com
  2. 1040now.net
  3. Fileyourtaxes.com
  4. Free1040taxreturn.com
  5. Jacksonhewitt.com
  6. Online Taxes at OLT.com

Tax Season 2016 – Tax Prep Apps of the Week

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The Internet rapidly automated so many things including filing your taxes.  Because of technology and software advances as many as 80 percent of Americans can and do prepare their own taxes using various software and web services.  

Many African-Americans access the web using smartphones. Because of this we need to examine some very good apps that can help you if decide to do your own taxes using your smartphone. These apps are designed to allow you to record and prepare financial records and even file taxes directly from your smartphone. These are the Apps of the Week.

 

IRS2GoIRS2Go – This is the official app of the Internal Revenue Service. Although you cannot actually file your taxes using this app you can check the status of your tax refund, make tax payments, and get updates from the IRS. IRS2Go also offers important numbers and times to call and ask questions. You can also sign up for tax hints through the app. For those of you who filed e-taxes you can check on their status with the app within 72 hours.

IRS2Go is free and available for Apple and Android.

 

 

 

 

myblock-mobile-app-dMy Block – Unlike IRS2Go the H&R My Block app is a bit more rich in features. My Block, one of two apps offered by the tax prep giant, allows the user to check their refund status. My Block also offers a robust help section that defines terms and answer basic tax questions. It also offers a checklist that helps the user create a tax filing to-do list along with tools that allow you to estimate the size of your refund. If you have additional questions My Block allows you to set up an appointment at a local H&R Block office.  You can also use My Block to upload documents so your tax pro will have them available during your appointment.

My Block is free and available for Apple and Android.

 

 

 

 

 

 

Tax Prtaxprep-mobile-app-deparation – H&R Block’s Tax Preparation is different from its sister app because it actually allows the user to prepare and file tax returns.  Tax Preparation does a neat trick by collecting and importing information directly from a photo of your W-2. The user can select from various versions from free, basic, deluxe to premium editions. The app shows the user what causes their refund to fluctuate, offers cross-platform syncing and status updates on your return. The app also offers advice and free, in-person audit support. 

Tax Preparation is free ad available for Apple and Android.

 

 

 

 

 

 

expensify-logoExpensify – Expensify wasn’t exactly made for preparing taxes. But if you own a business or are self-employed this app can help you get the most from your deductions. Using the app allows the self employed business person or any business owner to capture receipts, track billing hours and travel miles. Expensify allows the user to record any expenses or operating costs. It also automatically imports credit card transactions and scan receipts for expense reports that can later be converted to IRS-approved e-Receipts minimizing paper usage and hopefully any tax-related discrepancies.

Expensify is free and available for Apple and Android.

 

 

Ask a cpaAsk A CPA – Ask A CPA is an app with a host of basic tips encompassing the latest changes in tax law. These tips cover a variety of different categories, from alimony and dividends to adoption expenses and charitable deductions. Ask A CPA also gives the user the opportunity to ask specific questions it hasn’t already covered within the app’s archives. However there have been complaints about the text space available for questions. The coolest feature is that local CPAs in your area answer these questions. Ask A CPA is a powerful resource for owners of small businesses who need answers to common tax questions but also for individual taxpayers.

Ask A CPA is free and available for Apple and Android.

 

Turbo taxTurboTax Preparation – TurboTax Preparation works very similar to its online counterpart. The app offers a wealth of tax-related information and tools for preparing and e-filing your taxes. Like H&R Block’s Tax Preparation  app the TurboTax app can also pull information from a photo of your W-2. It provides step-by-step instructions while seeking out as many as 350 tax deductions and credits intended to maximize your refund.  The app double checks your return and the information you provided as you go.  Once loaded on your different devices the app syncs so you can switch between your iPhone, iPad or computer. 
 

Turbo Tax Preparation is free and available for Apple and Android.

 

 

 

 

 

Tax ActExTaxACT Express –  TaxAct Express is another full service app for filing taxes. It can help with most common tax situations and, like other apps, automatically imports information from a photo of your W-2. The app will track the status of your IRS refund and notify you when it’s been processed. The app also offer free e-filing of state and federal taxes for free. 

Tax ACT Express is free and available for Apple and Android

 

 

 

 

BNABNA Quick Tax Reference – BNA Quick Tax Reference provides some valuable reference material but is not exactly easy to use but then again it is meant for the more financially savvy user.  The user can find tables showing mileage rates, corporate tax rate schedules, individual tax rate schedules, standard deductions, retirement plan limits, and more. If you looking to file back taxes the tables can take you back to 2012. 

BNA Quick Tax Reference is free and available for Apple and Android.

 

 

turbotax-taxcasterTaxCaster – This app is also offered by Intuit makers of the TurboTax products.  TaxCaster is designed for filers with relatively simple taxes and a single job, much like the 1040EZ and 1040A tax forms and you don’t have to sign up to use it. The user simply enter their wages, marital status, earnings, and deductions.  TaxCaster can quickly give you a good idea of what kind of refund you might receive. This fairly simple app won’t  prepare your taxes, but it can give you a good idea what to expect when you do.

TaxCaster is free and available for Apple and Android.

 

 

Tax Season 2016 – Claim Your Refund ASAP!

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canstockphoto2986221Tax season 2016 is heating up rapidly. And as we’ve told you it is also scam season. Cyber crooks and identity thieves can’t  wait to use those millions of stolen Social Security numbers to file false claims and reap in millions more in fraudulent refunds. The best advice, whether or not you’re expecting a refund, is file your return as soon as possible! 

The IRS and most state tax agencies won’t get your W-2 information until April. This presents cyber criminals with a window of opportunity to file a fraudulent return using your Social Security number if they have it.  New laws should shorten that time by at least a month next year. But that is no help this year.

 According to the IRS 90 percent of federal refunds will be mailed or deposited within 21 days after returns are filed. But that still gives identity thieves plenty of time to file a fraudulent return before the IRS receives your W-2. 

According to Sandra Block of Kiplinger.com crooks using stolen Social Security numbers claimed $5.8 billion in fraudulent refunds in 2013 and the IRS says it blocked phony refunds worth another $24.2 billion.

So again our best advice is to not to wait to file your return. File as soon as you have all your documents. Quickly filing your return and claiming your refund can prevent a thief with your social security number from hijacking your refund before you get it. If you got it they can’t get it!

If you believe you have been the victim of identity theft or your Social Security number has been stolen you can file an Identity Theft Affidavit (Form 14039) with the IRS. 

Another to place to go if you believe that your identity has been stolen is Identitytheft.gov. This is a one stop comprehensive website to handle identity theft complaints and get you started at recovering your identity.

Even if you’re not concerned about someone stealing your tax refund, you should file early for the following reasons;

  • You will get your refund sooner.
  • You will have more time to plan if you owe money (it’s not due until April 15)
  • You’ll have more time to deal with any issues that come up. Tax firms and accountants are busy this time of year so  don’t wait until the last minute.

Now you know.

Tax Season 2016 – Hackers Attack IRS

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irs-logoHackers are hell bent on stealing tax refunds. On Tuesday the IRS announced an attack that occurred last month in which cyber criminals were able to steal taxpayer identification numbers before the Internal Revenue Service detected and shut down the attack. Hackers stole customer “Electronic Filing PINs,” meant to ensure information security. These PINs would enable hackers to file fraudulent tax returns.

More and more Americans are filing their taxes online. Officials expect 80 percent of the 150 million returns will be filed online this tax season. As a result the number of attempts by hackers to file fake returns and steal tax refunds is on the rise.

In a statement the IRS said that the hackers used a sophisticated automated software that used more than 450,000 stolen Social Security numbers to try to generate e-filing PINs. Even though the attack was stopped they were successful in securing about 100,000 PINS.

According to the IRS the SSN’s were “stolen elsewhere outside the IRS.” The agency added, “no personal taxpayer data was compromised or disclosed” by its systems. The IRS said it will notify taxpayers affected by the attack and will flag their accounts to guard against identity theft.

The IRS and the federal government are in possession of incredible amounts of personal data of U.S. citizens, Yet the government appears almost helpless to protect this data from cyber theives. Last year alone the government lost the data, including electronic finger print files,  of over  20 million Americans in a historic data breach of the Office of Personnel Management.

On Tuesday President Barack Obama proposed to spend $19 billion on more-secure technology for the government. If approved by Congress the money would be used to recruit cyber security experts, reducing reliance on unsafe items like SSNs, and overhauling the government’s computers.