Threat Management, Threat Management

Study finds taxpayers unaware, unprepared to combat fraud


A recent study found that 58 percent tax payers may not be as concerned as they should be about tax fraud, despite dozens of cases where W-2 tax form information has been stolen from employers already this year.

Despite the inherent danger taxpayers also aren't bothering to take additional steps to ensure their tax preparation firm is properly securing their information, with only 35 percent of taxpayers demanding these people use two-factor authentication and only 18 percent asking tax preparers to use an encrypted USB drive to save important tax documents, according to the annual CyberScout Tax Season Risk Report.

The study also found that 38 percent of the people surveyed themselves stored information using an unsecure method that leaving them open to attacks.

Fraudsters will have ample time to exploit these vulnerabilities, as 57 percent of respondents reportedly will file their taxes in March, April, or later. Many people do not even protect themselves from offline dangers with 50 percent saying they do not have a secure method of receiving tax refund checks such as having a locked mail box. A recent spate of W-2 attacks targeting a senior communities, school districts, and  other businesses give cause for more concern.

Adam Levin, founder of CyberScout, was surprised by the report's findings that most Americans are not worried about tax fraud despite the poor practices around keeping their information safe.

"Consumers can refuse to respond to requests for sensitive information via normal email and only do so on the phone with someone they know, by fax if they know that someone they trust is standing next to the fax or through a secure portal," Levin said. "Consumers might also contractually demand it from their preparer. "

In order to combat these threats, researchers recommend tax payers use direct deposit of refunds into your bank account or a locking mailbox for mailed refunds and monitor and protect their accounts and elements of their personal identity online and in social media. Its worth noting that the report did not take into consideration the number of people who store their tax information the old fashioned way under lock and key. 

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