7 On Your Side Warning: Protect yourself from tax season scams

NEW YORK (WABC) -- It's tax time and that means we all have to start gathering paperwork together for April 15 to pay taxes on income earned last year.

The process can be stressful enough, but now there's a new tax refund fraud scheme to worry about, which goes far beyond fishing checks out of the mailbox.

Since 90% of us file electronically, thieves have moved from the mailbox to the inbox.

The IRS says hackers tried to claim $3.1 billion in false refunds and the newest scheme holds your information for ransom.

Cyber-freezing puts your time-sensitive tax files on ice, only to be thawed in exchange for cold hard cash or the dark web's favorite currency: bitcoin.

"Things get hacked all the time, information gets exposed all the time," said data security expert and founder of CyberScout, Adam Levin.

Levin says companies or individuals will pay a huge ransom to get their files released, but then the scammers still use the data collected to file fake returns and cash in on inflated tax refunds.

It is important to protect your Social Security number. And during tax season, be very careful of who gets access to your Social Security number.

"Who you're paying, who you're hiring, why open your life needlessly when our lives are already too open," Levin said.

Don't Click on Links

Levin warns never click on emailed links from someone claiming to be a tax service or from the IRS. The links can lead you to official-looking websites or forms, then steal your banking information.

Recent data breaches made it easier to file fake returns using your key information, but hackers are also busy calling and texting people right now to trick them into thinking they are the IRS.

Timothy Camus, the Deputy Inspector General of the U.S. Treasury, says hackers will use fake telephone numbers, demand immediate payment and threaten arrest or deportation.

"Don't believe them, just hang up, don't give any information to these crooks," Camus said.

The Big Takeaway

-The IRS will not call or text.

-The IRS will never ask you to provide your Social Security number.

-The real IRS also won't ask you to wire money or pay with gift cards like Green Dot, Apple, eBay or Google Pay or any retail store cards.

-That's why it's so important to file early and before scammers beat you to it. But if someone did steal your identity, notify the IRS right away and request a copy of the phony return.

Click here if you learn someone filed a fraudulent return on your behalf.

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