Technology

It’s That Time of Year Again: Tax Phishing Season

By

Paul Baresel

| Mar 20, 2017

It’s That Time of Year Again: Tax Phishing Season

With tax season upon us, so are security concerns. Con artists – or “malicious actors” as they’re known in information technology (IT) circles – understand that people may be more susceptible to a well-crafted phishing email during tax-filing and refund time. For example, you would most likely be suspicious of an email about your W-2 form, or a request to complete an attached tax form arrived in July, October or December. But what if the same email landed in your inbox during February, March or April?

Most phishing emails should be easy to identify; telltale signs are poor grammar and punctuation or odd capitalization. However, some attempts will be more sophisticated. Since loose clicks sink ships, here are some examples of active phishing campaigns and some phishing best practices.

The Data-Harvesting Attack

The malicious actor will pose as a potential client, asking for tax preparation assistance. The exchange seems innocuous, but the malicious actor will set up a situation in which the victim lets down his or her guard and opens an attachment at some point during subsequent emails. This attachment exploits a vulnerability, harvesting contact information, which the attacker then uses to impersonate you and claim your tax refund.

The Log-In Request Attack

As a variation of this attack, you could be tricked into clicking a link or opening an attachment that requests that you log-in in with your email account credentials. Again, this scam exposes contact information, opening yourself up to phishing attacks.

The W-2 CEO Fraud Scam

The W-2 CEO Fraud scam is yet another phishing attack that targets innocent people by impersonating the CEO, President or other authority figure in the company. The newest variation of this email attack requests 2016 1040-EZ Form for all employees for accounting purposes and emphasizes urgency. This type of attack is extremely targeted because the malicious actor often knows who has access to the requested information and who most likely would be the employee making such a hasty request. This form of attack rarely has a formal signature, just a simple “thanks,” followed by the sender’s first name and a “Sent from my iPhone” tag. The attacker tries to make the email feel friendly, while also using authority and urgency to motivate the recipient.

Remember that sensitive information never should be transmitted over email. Legitimate institutions understand that email is not secure, and it should not be treated as such in regards to the exchange of sensitive financial and tax information. Paycom has secure ways to upload highly sensitive documents that are entirely independent of email. Anyone who tries to circumvent secure transmitting procedures – intentionally or not – should be instructed on how to share data securely. Any phishing incidents and attempts also should be shared with your information technology security team.

The IRS/Tax Commissioner Scam

For instance, a malicious actor will impersonate the IRS/Tax Commissioner, requesting you to fill out an attached form. The new form request is “due to a system upgrade.” The form name or number might even be a legitimate, though unfamiliar, IRS form, like the W-8BEN-E Form.

However, the fake form will have sections that not only request expected sensitive information, but also extensive bank account information such as:

  • Your bank’s branch address
  • Account officer’s name and email
  • Date account was opened
  • Date and amount of last deposit

This specific information allows the malicious actor to drain your bank accounts, in addition to claiming your tax refunds. Please note that legitimate sources will never need or request this level of account detail in order to file your taxes electronically and to complete a direct deposit.

In more personalized attacks, the malicious actor has figured out and will impersonate who prepares or handles your tax information. Similar to above, the attacker will ask you to fill out a form that may or may not include your banking information. Keep in mind that a malicious actor only needs basic tax information to steal your tax refund.

General Phishing Best Practices:

  1. Never send sensitive information through email.
  2. Be wary of unexpected email links, unexpected attachments and emails that stress urgency or that use fear as a motivator.
  3. Do not verify a suspicious email with an email reply.
  4. Call the sender using contact information you already have. If you don’t have contact information, independently search for the website–do not click any links.
  5. Financial institutions always send personalized emails that are addressed to you, in addition to having the last four digits of your account number. If these things are missing, be suspicious.
  6. Check the hyperlinks in all emails before clicking them by hovering over the link. Alternatively, use a bookmark that you’ve previously saved, use a Google search, or type the address manually.
  7. When looking for the URL domain name, start from the right, not the left.
    • Example: If read from left to right,http://www.paypal.com-verify-transactionid-84937213938021.login.ebay-buyprotection<dot>net/ this link appears to belong to PayPal. However, the address is actually ebay-buyprotection<dot>net, not PayPal.com.
  8. If you suspect you have been phished, contact your IT department or IT security team immediately. If you suspect that you are a phishing target, forward the email to spam@uce.gov, the impersonated institution, and your IT department.
  9. Check for the HTTPS and a closed padlock icon in the address bar anytime you are enter confidential information into an online application. This ensures the security of information entered and indicates a legitimate and registered website.

 

Remember: legitimate sources, clients, colleagues, bosses, etc., should never:

  • request sensitive information in an email signed with a “Sent from my iPhone” tag
  • send forms through email
  • send generic, impersonalized email (emails that do not address you by name)
  • ask for personal or financial information through email
  • request banking information in paper/electronic document forms
  • resort to threatening or intimidating language to click links in email
  • send emails with poor grammar or awkward language; always check grammar and language usage

Lastly, be suspicious of any email that requests highly sensitive information, or use email addresses that are not from the company’s domain. Check the sender’s email address. It might say it’s someone from your contacts list or a legitimate institution, but it is surprisingly easy to spoof the name associated with an email.

About the Author

Paul Baresel

With expertise in compliance, data leak prevention and enterprise e-discovery, Paul Baresel brings more than 13 years’ experience in cybersecurity to his role as Paycom’s Information Technology Security Manager. He previously served in similar roles at American Energy Partners, Farmers Insurance and Chesapeake Energy. After graduating from the University of Central Oklahoma with a degree in information systems management, the native Oklahoman earned his MBA from Oklahoma Christian University. Outside of work, he enjoys running, climbing and spending time with his wife and their three children.

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