Tax Fraud Alert - Your Tax Forms Selling for $20 Online

What Happened

Tax season has turned into a prime opportunity for identity theft, with criminals exploiting stolen personal data to file fraudulent tax returns. Malwarebytes researchers have discovered a thriving market on the dark web where tax records are traded for as little as $20. This alarming trend highlights the ease with which fraudsters can access sensitive information and the potential consequences for unsuspecting taxpayers.

Stolen Identity Refund Fraud (SIRF) is the term used for this type of crime. Criminals steal personal information, such as Social Security numbers and birth dates, to file fake tax returns and claim refunds before the legitimate taxpayer can. Victims often only realize they have been defrauded when their legitimate tax returns are rejected by the IRS.

Who's Being Targeted

The primary targets of this fraud are individuals filing their taxes. During tax season, people are more likely to share personal information, making them vulnerable to phishing scams. Cybercriminals take advantage of this by sending fake IRS alerts and phishing emails that appear legitimate. The dark web facilitates this crime by providing easy access to stolen Personally Identifiable Information (PII) and tools for executing these scams.

Fraudsters are not just harvesting data from individuals; they are purchasing bulk datasets from underground forums. These datasets often include ready-to-use tax forms, making it easier for criminals to commit fraud. The organized nature of this criminal activity has turned tax season into a lucrative business for cybercriminals.

What Data Was Exposed

The dark web marketplace for stolen tax information is staggering. Recent findings show that a bulk package of 100 complete tax forms can be purchased for $2,000, effectively pricing each stolen identity at just $20. Older data, particularly from the 2024 tax year, is even cheaper, with sensitive records selling for less than $4 per identity.

Additionally, threat actors are auctioning off access to databases containing sensitive PII from compromised tax service firms. For example, one listing offered access to a database with the PII of over 1,600 clients. This highlights the systemic weaknesses in businesses that handle tax preparation, making them prime targets for cybercriminals.

What You Should Do

To protect yourself from becoming a victim of identity theft during tax season, consider the following steps:

• File your taxes early. This reduces the chance of criminals filing a fake return in your name.
• Protect your Social Security number. Share it only when absolutely necessary.
• Be cautious of phishing attempts. Watch out for emails or texts that appear to be from the IRS or financial institutions.
• Use strong passwords. Ensure your online accounts are secure to prevent unauthorized access.
• Monitor your financial activity. Keep an eye on your accounts and credit reports for any unusual activity.
• Consider an IRS Identity Protection PIN. This adds an extra layer of security when filing your tax return.

By taking these precautions, you can significantly reduce your risk of falling victim to tax-related identity theft.