Tax season is one of the busiest times of year for your business, as well as, unfortunately, one of the most dangerous. You’re handling sensitive financial data, communicating with the IRS and accountants, and scrambling to meet tight deadlines, all while cybercriminals develop new tax-related cyberattacks.
Attackers ramp up their efforts this time of year because they know that urgency and divided attention lead to mistakes. A rushed employee may click a malicious link, approve a fraudulent payment, or share sensitive information without verifying the request. A single incident during this sensitive time can lead to untenable financial loss, data breaches, and compliance issues, especially for small and midsized businesses (SMBs) like yours.
Understanding how these scams work is the first step to protecting your business, so let's take a look at some common tax season attacks and how to counter them.
Tax season scams and cyberattacks and how to prevent them
There are many avenues of attack that cybercriminals can utilize against you. The good news is that you can reduce your risk with better awareness, updated best practices, and cost-effective technologies.
Phishing and BEC attacks
Phishing emails and business email compromise (BEC) attacks are among the most common threats during tax season. You may receive messages that appear to come from executives, accountants, or vendors requesting urgent action with tax implications.
These emails often ask you to transfer funds, share tax documents, or update payment details, and because they mimic real communications, they can be more difficult to spot than you might think.
The best way to reduce the risk of BEC is cybersecurity training that teaches your employees to spot phishing emails and verify all financial requests before acting. Also, implement multifactor authentication to secure email accounts and require secondary approval for transactions involving sensitive data or large payments.
Fake IRS communications
Cybercriminals know that many people panic when they get communications from the IRS, and they are far more likely to comply with their demands despite red flags. During tax season, you might receive emails or phone calls from attackers impersonating the IRS, warning of penalties or requesting immediate payment.
Train your team to stay calm during any possible IRS interactions, and remind them that legitimate tax authorities do not request sensitive information via email or demand immediate payment through unusual methods. Always verify communications by contacting the agency directly through official channels.
Fake tax preparation services and websites
Attackers create fraudulent tax preparation websites that closely resemble legitimate services to target businesses as well as individuals. If you or your employees provide business information to these platforms, it can be captured and used for identity theft or fraud.
To avoid this, only work with trusted, verified tax professionals and platforms. Bookmark official websites and avoid accessing financial tools through links in emails or online ads. Also, do extensive research on any person or organization you trust with your financial information.
Ransomware targeting financial data
Ransomware attacks increase significantly during tax season because attackers know your business depends on access to financial records.
After getting inside your network with compromised login credentials, ransomware can encrypt critical files when you need them most, bringing your operations to a halt until you pay the ransom.
Reduce your risk by keeping all systems updated with the latest security patches and using endpoint protection tools. Most importantly, maintain secure, regularly tested data backups so you can restore your data without paying a ransom even if the attack is successful.
Invoice fraud
Invoice fraud is another common tax season scam. Cybercriminals may intercept or spoof vendor communications, sending fake invoices from partners that appear legitimate. These can easily slip through while your team is processing high volumes of transactions, leading to a big payout to a cybercriminal’s bank account.
To prevent this, establish strict verification procedures for invoices and payment changes. Also, consider preventing a single point of failure by separating approval responsibilities within your team and getting more eyes on the approval process.
Tax season is stressful enough without having to worry about cyberattacks, and there aren’t many worse times than now to suffer a data breach. If you want to minimize your risk and ensure a smooth tax season, contact outsourceIT for a personalized cybersecurity action plan.
