Electronic tax

Tax season: watch out for the rise in fraud and fraudsters

Investors are pumping millions into encryption as unease over data security drives a growing need for ways to deflect unwanted eyes from personal and corporate information – AFP

As the deadline for declaring taxes quickly approaching for those residing in the United States, people should be aware of the risks around tax evasion.

To understand the risks associated with tax reporting, Digital diary spoke with Vanita Pandey, Chief Strategy Officer at Arkose Labs. Pandey is keen to highlight how taxpayers can stay ahead of evolving tax evasion tactics.

Pandey begins his analysis by examining why some people seek to defraud others: modus operandi for tax evasion is simple, with attackers relying heavily on social engineering. They make phone calls or send emails – apparently from the tax department – ​​to pressure consumers into “paying taxes” on fake websites or sharing personal and tax information. »

She cautions: “These fake phishing calls and emails have evolved over time, making it difficult for an average consumer to identify them as fake or manipulative.”

In terms of specific vulnerabilities, Pandey advises, “Cybercriminals are taking advantage of the anonymity of the Internet and the easy availability of commoditized tools to impersonate legitimate consumers and divert tax refunds to their own accounts.”

Among other nefarious activities, Pandey cites: “They will also seek to exploit the huge backlog of millions of returns from the previous year to avail of several tax refunds including income tax credit, credit child tax credit, recovery rebate credit, and employee benefits, among others.”

Another for cyberattack is “takeover”. Pandey defines it as follows: “Attackers may attempt account takeover attacks to penetrate tax preparers’ networks and taxpayers’ online accounts in order to manipulate them for tax evasion purposes.”

As an example, Pandey raises: “In the event of a successful takeover of consumer tax accounts, attackers can alter bank account details with their own to redirect funds. Likewise, attackers can piece together stolen and fake details to create synthetic identities, which they can then use to create new fraudulent accounts.

In another warning, Pandey says, “Attackers are deploying bots to create new accounts in hordes, allowing them to file multiple false tax returns and obtain illegitimate refunds multiple times.”