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Tax Refunds Fall Victim to Rising AI-Driven Scams: Stay Alert and Protect Your Finances

Tax Identity Theft: A Growing Concern Amidst Advances in AI

AI-Driven Tax Fraud Poses Significant Challenges for Taxpayers and Authorities

Tax season in 2024 is facing a looming threat as cybercriminals harness the power of AI to perpetrate tax-related fraud. By creating convincing fake images and videos these scammers can impersonate taxpayers, leading to stolen refunds. This spike in fraudulent activity matters because victims of tax identity theft often endure lengthy waits, averaging 19 months for the IRS to rectify the situation and issue their refunds.

The modus operandi of these scammers involves collecting personal data from various sources, including publicly available information and data obtained through phishing scams. They then file fake tax returns before the real taxpayers can submit theirs, exploiting the once per year transaction nature of tax refunds. With AI’s aid fraudsters can produce fakes more swiftly and employ sophisticated techniques to outsmart IRS and accounting firm security measures posing significant challenges for authorities and taxpayers alike.

READ ALSO: California Lawmakers Propose Significant Budget Cuts To Tackle Growing Deficit

Vigilance Against Cyber Threats Crucial as Tax Season Unfolds

Despite efforts to combat tax fraud including upgrades to IRS computer systems and increased audits of large corporate taxpayers the rise of AI poses a formidable challenge. While the Treasury has employed AI to detect fraudulent transactions successfully, taxpayers are urged to take precautions such as filing early, using direct deposit and avoiding trusting communications purportedly from the IRS via phone, text or email. As tax season unfolds the need for vigilance against cyber threats remains paramount, underscoring the importance of timely filing and adherence to IRS guidelines to mitigate the risk of falling victim to tax-related fraud.

READ ALSO: New Initiative Aims To End Taxpayer Funding For Schools Fostering Racial Bias In Medical Education

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