As April 15 looms, millions of taxpayers are going through the nerve-wracking process of filling out 1040 forms and calculating deductions. That’s agonizing in itself—but to make matters worse, cunning identity thieves are filing fraudulent tax returns claiming refunds and sending out bogus emails in the name of the IRS soliciting personal data. The situation has gotten so out of hand that it made the front page of the personal finance section of The Wall Street Journal.

According to the The Wall Street Journal’s in-depth report, IRS National Taxpayer Advocate Nina Olson reported to Congress that identify theft and fraudulent returns claiming refunds is “one of the most serious problems” facing taxpayers today. In addition to filing returns in someone else’s name, fraudsters have been known to send out phony phishing emails that look like they come from the IRS. The emails typically inform recipients that they have a refund coming. You’re asked to click on a link, and you’re presented with a form that asks you for confidential data, such as Social Security numbers, credit card numbers, and bank accounts in order to process the check.

This year, taxpayers are probably more susceptible than ever, because an estimated 130 million American households are slated to receive a one-time payment as a result of the Economic Stimulus Act of 2008. Everyone is eager to receive the extra cash to pay for that new barbecue or summer vacation, but a little healthy caution can prevent a great deal of grief.

Schemes and scams
Recently, a spate of phishing scams aimed at well-meaning taxpayers have infiltrated email inboxes. For more details, visit the IRS web site: http://www.irs.gov/newsroom/article/0,,id=155682,00.html.

1. Refund schemes: There have been a number of variations on this theme. One of the most recent phishing scams is directed at organizations that distribute funds to other organizations or individuals. The email contains the name and fake signature of the “director of the exempt organizations” area of the IRS and attempts to entice recipients to click on a link to access a form for a tax refund.
   
   A related phishing scam that looks like it’s being sent by the IRS and the Taxpayer Advocate Service (a legitimate independent organization within the IRS that helps taxpayers with unresolved tax problems) takes you to a phony IRS web site, where you are directed to fill out an online form with your personal information.
   
   In yet another version, an email message that looks like it’s been sent by the IRS informs taxpayers that they are eligible to receive a tax refund of a specific amount. Taxpayers are directed to a site entitled "Get Your Tax Refund,” which looks very much like the real thing ("Where's My Refund?" on the IRS web site). This phony site requests that taxpayers supply Social Security numbers and filing status—just like the IRS site. But instead of being asked for the amount of the refund due to you according to your tax return, you’re asked to enter credit card account numbers.
2. False tax return criminal investigation: California residents, watch out for this one, as it appears highly convincing and unnerving! This email scheme looks like it comes from the IRS's Criminal Investigation division. In very official-sounding language, it informs you that you are under a criminal probe for submitting a false tax return to the California Franchise Board. If you receive this email, you’re asked to click on a link or open an attachment to learn more about the complaint that has been filed against you. The link and attachment both contain a Trojan Horse that commandeers your hard drive and allows cybercriminals remotely access to your computer. Knowing that criminals do indeed file fraudulent returns, you may just suspect that someone has stolen your personal data. Don’t fall for it!
3. IRS survey: Want to earn an easy $80? Think again. In this scam a message claiming to come from the IRS tells you that you’ll receive enough to cover dinner for two at a gourmet restaurant by simply answering some questions in an online survey. The survey includes typical customer satisfaction questions along with your name, phone number, and credit card information.

What’s a taxpayer to do?
The most important thing to remember first and foremost is that the IRS never ever sends unsolicited emails. If you receive messages that look like they are coming from the IRS, ignore them. Avoid replying or clicking on links that take you to suspicious web sites, and never offer your personal data, no matter how convincing an email or web site might appear.

Here are a few other measures you can take:

• Report phishing schemes to the IRS
  If you receive an unsolicited email claiming to come from the IRS, send the original message to: phishing@irs.gov. For detailed instructions, see http://www.irs.gov/privacy/article/0,,id=179820,00.html.
• Report fraud to the IRS
  For all other scams—such as phone schemes or fraudulent tax returns filed in your name—you can call the Treasury Inspector General for Tax Administration (TIGTA) toll-free hotline at 1-800-366-4484 or visiting the TIGTA web site.
• Educate Yourself
  When it comes to tax-time phishing scams, knowledge is power. Keep your wits about you, and quell your eagerness to receive your refund when you review your inbox. Take some time to read the material below to acquaint yourself with how identity thieves operate and how you can avoid them.
  • Tax Time Phishing Scams Get a quick overview of phishing techniques aimed at innocent taxpayers.
  • Basics of Identity Theft Stay informed by finding out everything you need to know about identity theft.
  • Create a Plan to Protect Against Identity Theft Here are some simple preventive measures you can take to defend your family against identity thieves.
  • Internal Revenue web site The IRS provides details on a number of recent scams that it has uncovered, including rebate phone calls, refund emails, audit emails, changes to tax law emails, and paper check phone calls.

You can make tax time less stressful and prevent greedy identity thieves from wreaking havoc with your life by simply taking a few precautions. Get smarter about threats that are rampant at this time of year by keeping up on the news and reviewing news and tips on the IRS site, ignore unsolicited emails that ostensibly are coming from the IRS, and defend yourself with security software from trusted vendors like McAfee.