The IRS is paying much more attention to tax fraud in 2016, and so should you.

Earlier this year, the IRS indicated it will be taking up to 21 days to review 2015 tax returns in a stepped-up effort to prevent the fulfillment of fraudulent refunds. This is a significant increase over the agency’s 7-day standard review time in 2015.

When such a large government entity makes such a dramatic change in its operations, one thing becomes crystal clear:

Tax fraud is a very real problem that has to be addressed NOW.

The simple fact that the IRS has implemented specific measures to halt tax fraud – including industry-wide standards for passwords, account validation and information sharing – is a terrific sign. According to the agency, 1.4 million fraudulent returns, representing a whopping $8.7 billion in potential refunds, were stopped in 2015.

Tax Fraud Schemes

But then again, perhaps it’s not such a surprise move, given the effectiveness of the tax fraud strategies criminals are frequently using, such as:

Beating Taxpayers to the Punch
Most often, a fraudster obtains a legitimate Social Security number and birth date through a phishing scheme or site breach, files a phony return as early as possible to beat the legitimate taxpayer to filing, and elects to receive an easily redeemable prepaid debit or gift card.

Leveraging Social Engineering
Increasingly, fraudsters are contacting customers, posing as an IRS representative, telling victims that there is a warrant out for their arrest for owing back-taxes which can only be excused in exchange for paying a fee immediately. The fraudster then instructs the victim on how to forward the fee, often staying on the phone with them until the money is received.

Intercepting W2 Forms
Fraudsters are also obtaining W2 information directly from businesses by emailing them and posing as the CEO or other executive requesting the information. From there, they are able to immediately file a fraudulent return.

With schemes like these in play, and new ones that could very well be in the works, it’s imperative for taxpayers to do everything they can to prevent someone from stealing their tax return.

How to Protect Yourself

Given that an identity theft claim takes, on average, 278 days to be cleared, there is really no fool-proof way to keep your identity safe. However, there’s a long list of precautions that consumers can take to protect themselves from tax fraud.

Here are just a few of them:

  • File early: If you file your tax return before an identity thief, that person’s fake return will be denied.
  • Guard personal information: Shred documents that contain your personal information, avoid giving it out, lock your mailbox to prevent mail theft, and constantly keep an eye out for mail, phone and email scams.
  • Review your Social Security earnings statement: Check it every year. If you notice that the number is off, contact the IRS immediately.
  • Avoid public WiFi when filing: Criminals can access your computer on a public Wi-Fi network and get their hands on your personally identifiable information.
  • Ignore calls or emails claiming to be the IRS: The IRS will never call or email you to ask for personal information, or claim that you may be arrest for unpaid back taxes.
  • Use a reputable tax preparer: The IRS has a list of tips for choosing a preparer, details on preparer qualifications, and information about how and when to make a complaint.

Of course, the only thing worse than slogging through filing your taxes is having someone else steal the refund that’s rightfully yours. Fortunately, just as the IRS is making changes, we can also do our part to curb the efforts of fraudsters during tax season.

Stay vigilant, everyone.