Here’s What Happens When Scammers Get Their Hands on Your Tax Data
The internet can be a scary place.
The websites we visit every day are nothing but a speck on the World Wide Web. Beyond the public internet we use daily, there’s a sometimes dangerous version of the web that goes unmonitored: the dark web.
A notorious marketplace for drugs, body parts, hit men and credit card information, the dark web is also a place where valuable pieces of people’s identities are sold: tax information, such as W-2s and 1040 returns.
Bloomberg reports that IBM X-Force, IBM’s security research group, noted a more than 6,000% increase in tax spam emails intercepted by its system from December 2016 to February 2017.
Wait, What is the Dark Web?
If you aren’t familiar with what exactly the dark web is, here’s a quick rundown.
The dark web refers to websites that you can only access through a special connection. Think of it as a different internet you can unlock only with a special key.
Search engines are unable to track sites on the dark web, which are invisible to traditional browsers.
Everyday users of the public internet have IP addresses tying them to a location and giving them an identity. Dark web users hide behind Tor, an encryption tool that allows them to remain anonymous.
This anonymity results in a complete lack of security in the dark web, which makes it open game for criminals.
Although it’s home to dangerous content and illegal activity, some argue that the dark web also contains some good. It can be a platform for the politically oppressed to express opinions that could result in persecution if they voiced them publicly, and it can also allow people to buy lifesaving medications at a fraction of their regular costs.
Criminals Can Sell Your Tax Information on the Dark Web
So, now you know about the big, bad and scary beast known as the dark web -- but how does it affect you?
If you fall victim to a tax scam email, your entire tax form could get sold on the dark web. Some sell for $50 or more in bitcoin, and criminals sometimes withhold certain parts of them to entice purchasers to spend even more.
Using the information on your tax forms, criminals can take out loans in your name, open credit cards or even file for a tax refund in your name.
Sure, you could have a good chunk of change stolen from you along the way, but having your identity stolen is an even bigger headache. It can throw your credit score into the pits, drain your bank accounts and leave you struggling to recover for years.
So, how can you protect your tax information from getting stolen on the dark web?
Bloomberg recommends filing your taxes early. Which, yeah, would be a great idea if tax day wasn’t less than two weeks away… so let’s come up with some other ideas, shall we?
Here’s one: Never send your tax information via email. The IRS will never demand you email information. (However, it can now use a third-party debt collector in limited cases.)
Here’s another: If you’re ever in doubt, just don’t give out any information whatsoever. Call the IRS directly, and have them verify that the person who contacted you is really a representative. It never hurts to double-check.
Your Turn: How do you protect your identity?
Kelly Smith is a junior writer and engagement specialist at The Penny Hoarder. Catch her on Twitter at @keywordkelly.