Friday, March 21, 2014
Tax Management at Bp Holdings: How to protect yourself when filing taxes online
More than 27 million taxpayers already have filed their taxes for 2013 from home computers, a process known as e-filing. As of this week, that's up 6 percent from 2012.
But the convenience of electronic filing also allows cybercriminals to file fraudulent tax returns—undetected—to the tune of $3.6 billion for tax year 2011, according to the most recent review by the Treasury Inspector General for Tax Administration.
Here's how to protect yourself when electronically filing taxes, according tocybersecurity experts CNBC interviewed.
A key strategy for fraudsters is to contact individuals via email, and to pretend to be the Internal Revenue Service, said Roel Schouwenberg, principal security researcher at Kaspersky Lab, which provides Internet security products and services. This is known as phishing. Unsuspecting users then click on links that allow malware to be downloaded on to computers.
Mustafa Rassiwala, a cybersecurity expert, said the suspicious emails can appear like legitimate requests for information.
Beyond diving into suspicious-looking emails, there are additional steps you can take to protect personal information and prevent fraud.
For example, taxpayers should use a different password for tax filing than passwords to access other online accounts, Rassiwala said.
Don't file your taxes at public places including Starbucks. While many cafes offer free Wi-Fi, the connection could be intercepted by cybercriminals, according to Rassiwala. Instead, only file taxes from your home network, said Kaspersky Lab's Schouwenberg.
Fraudulent e-filing is part of a broader problem of identity theft, which is growing. According to the Identity Theft Resource Center, more than 624 million records of personal information have been stolen since it began keeping track in 2005. This includes recent, high-profile breaches at Target, Sony and Living Social, an online deal site. Cybercriminals collect personal information—Social Security numbers, addresses and dates of birth—to file fraudulent tax returns.
E-filing taxes isn't all bad news. Unlike traditional paper filing, cyberthieves can leave behind digital clues for investigators when filing online. Digital records, for example, can telegraph Internet Protocol, or IP, addresses associated with computers and other devices.