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Online security missteps during the holidays could lead to identity theft and tax fraud

November 26, 2023
Man shopping at laptop with credit card_andrej-lisakov-Tf75FqfOJGk-unsplash1

Photo via Unsplash+ in collaboration with Andrej Lišakov

The official holiday shopping season is officially underway. So is the identity theft season, which could cause lots of problems for shoppers at tax time.

I know about the shopping season because my email box is overflowing with "Buy Now!" and "Bargains, Bargains, Bargains" and "Get 40% Off!" messages, mostly for stuff I have no intention of buying at any price.

I know about the tax threat because next week, Nov. 27 through Dec. 1, is the eighth annual National Tax Security Awareness week.

During these coming five days, just as online shopping ramps up, the Internal Revenue Service and its Security Summit partners in state tax agencies and the nation's tax industry focus on ways taxpayers and tax professionals can protect sensitive financial information.

Seasonal security steps: Security precautions are particularly important during the holiday season. Criminals take advantage of the increased online activity to trick people into sharing sensitive personal information through email, text message, and social media.

The IRS' and Security Summit's concern is that these identity thieves then use the stolen information to file false tax returns seeking fraudulent refunds when tax season arrives in January.

Each of the coming weekdays will focus on a special security area. For tomorrow's Cyber Monday, the IRS and Security Summit partners remind shoppers to take some basic steps when buying online. They include —

  • Use anti-virus software with anti-malware. Make sure it includes a firewall to prevent intrusions.
  • Use strong and unique passwords for all accounts.
  • Use multi-factor authentication whenever possible.
  • Shop only secure websites with the padlock icon and "https" in the web address.
  • Don't shop on unsecured or public Wi-Fi.

None of these online shopping tips are new. However, since we all basically are perpetually online, we tend to take those actions for granted and forget that some in the cyber world are just waiting for one online security misstep.

Watch out for fake charity pleas: Remember, too, that identity thieves are always upping their criminal games.

"The Security Summit has made incredible strides to protect taxpayers across the nation, but identity thieves continue to evolve," said Peter Barca, who serves as the Federation of Tax Administrators Board of Trustees president and Wisconsin Department of Revenue secretary. "We encourage taxpayers, businesses and tax professionals to remain on guard against these threats."

And sometimes the crooks build on methods that have worked in the past.

During the holidays, many people want to help others who are less fortunate. Crooks know this, and often use recent tragedies or imitate charitable groups to coax people into sharing sensitive financial data.

In these cases, the criminals' victims lose more than the money they intended for a good cause. The information they shared with scammers often is used in tax-related identity theft schemes.

More anti-scam help: The IRS Identity Theft Central web pages has more security tips for individuals, as well as for tax professionals and businesses.

You also can check out the IRS/Security Summit YouTube security videos, including Easy Steps to Protect Your Computer and Phone and Security Measures Help Protect Against Tax-Related Identity Theft.

And you can, shameless plug alert, take a look at my prior posts, such as

You can find even more in the ol' blog's identity theft and scams categories.

More than a week of security: Because of the increased security threats this time of year, the IRS and Security Summit's National Tax Security Awareness week Nov. 27 through Dec. 1 earns those dates this week's By the Numbers honors.

"This security week highlights ways for taxpayers and tax professionals to protect themselves against rapidly evolving identity theft schemes to steal tax and other financial data," said IRS Commissioner Danny Werfel.

Those five days also are a good reminder of another key identity security number: 365. That's how many days — OK, 366 in Leap Years — that we need to stay on guard against tax and financial scammers and crooks.

 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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