One of tax return filing season’s biggest financial risks isn’t an IRS audit

Published

5 hours ago

February 7, 2025

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Tax season has officially started, so you should prepare to file your 2024 tax return, and prepare for the scammers who are already prowling. Don’t get baited and hooked.

Many people are lax about protecting their personal information online, and there’s more reason than ever to be wary given widespread hacks such as the massive data breach of background check company National Public Data that exposed an estimated 2.9 billion records, including Social Security numbers.

Protecting yourself is important for many reasons, including how time-consuming and difficult it can be to recover from tax-identity theft, said Andy Phillips, vice president of The Tax Institute at H&R Block.

“Consumers need to be thoughtful about how they protect their personal and tax information online to avoid becoming a victim of tax-related identity theft,” he said.

There’s also always the risk that financial need and stress lead people to make hasty decisions when something too good to be true is offered. Nearly 40% of taxpayers will need refunds to make ends meet, according to a recent Credit Karma survey.

There are some basic do’s and don’ts of working with tax professionals that are always the starting point. More than half of taxpayers turn to a tax professional for help filing a tax return, according to the Internal Revenue Service. Choosing a reputable provider can prevent financial harm. Taxpayers should avoid unethical “ghost” return preparers who don’t sign or include a valid preparer tax identification number (PTIN) on every tax return they prepare.

Taxpayers can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find trusted professionals. Choosing a provider affiliated with a recognized national tax association is also advisable. The National Association of State Boards of Accountancy also maintains a database to help consumers check whether their provider is a certified public accountant and in good standing.

Then, there are all the more specific ways that the migration of our tax lives, and daily lives, online introduce additional risks to tax season. Here are several ways consumers can help keep their identities and personal information safe.

Make sure the provider uses secure online processes

Choosing a vetted tax professional is the first step, but when sending personal information over the Internet, be sure your provider gives you a secure link, so the information goes directly to the intended recipient in a secure fashion, said Lisa Greene-Lewis, a spokeswoman for TurboTax.

If your tax professional is asking you to send personal information via email, it could be time to switch providers. “I wouldn’t send important documents over email,” Greene-Lewis said.

File early, or use an IRS pin, to cut down on tax-related identity theft

Fraudsters sometimes try to file a tax return using someone else’s Social Security number. To mitigate this possibility, submit your taxes as early as possible, Phillips said. In many cases, a Social Security number can only be used on one electronically filed tax return, so filing early helps reduce the potential of tax ID theft.

Many people do this already, of course, many because they expect a refund. The IRS estimates more than 140 million individual tax returns for tax year 2024 to be filed ahead of the April 15 federal deadline.

Another option is for taxpayers to request an identity protection pin from the IRS, which prevents someone else from filing a tax return using their Social Security number or individual taxpayer identification number. This pin helps verify the taxpayer’s identity when filing an electronic or paper tax return, adding an extra layer of security. Many taxpayers are eligible to establish a pin online. Otherwise, there’s an option to fill out a PDF and send it to the IRS via postal mail or fax.

Watch out for the fake ‘IRS’ email or text

Thousands of people have lost millions of dollars and their personal information to tax scams, according to the IRS, so it’s important to know the warning signs. The IRS typically contacts people the first time through regular U.S. mail delivered by the U.S. Postal Service. To verify the IRS sent the letter or notice, you can search for it on IRS.gov. Some letters are sent from private collection agencies.

The IRS will never initiate contact with you by email, with a few exceptions such as if you have an account and opt in to email, and criminal investigations. Similarly, the IRS won’t text taxpayers without their permission. The IRS might call to discuss your case, verify information or set up a meeting, but it won’t be unsolicited. In-person visits are also rare, and the IRS generally sends a letter beforehand.

Often fraudulent communications claiming to be from the IRS or associated individuals can have typos or other mistakes in them, but with artificial intelligence, these communications are more sophisticated and scams can be harder to spot. The best advice is not to click on random links contained in an email or text, even if it’s from someone you think you recognize. Emails and texts can be easily spoofed and it’s better to be safe than sorry.

Don’t rush to claim offers about refunds, credits and payments

Scammers often attempt to mislead people about tax refunds, credits and payments. They pressure people for personal, financial, employment information or money. Warning signs of a possible scam include the promise of a large payday, demands to pay immediately or threats if you don’t.

Also, don’t fall for scams where someone offers to seek benefits on your behalf for a portion of the refund. “If someone is charging you a portion of your refund, that is a red flag. You need to walk away,” Phillips said. If they offer to help with the credit, but refuse to sign your tax return, that’s another red flag, he added.

Consumers can read the latest consumer alerts about tax scams identified by the IRS on its website.

Beware of pandemic-related scams still being used today

New scams or old ones with a slightly different twist are always popping up.

In January, the Identity Theft Resource Center warned consumers about criminals who claim, in emails and texts, to be from the IRS in order to trick people into believing they are eligible for a pandemic-related Economic Impact Payment (EIP). Scammers are hoping to ensnare victims into responding or clicking on a malicious link so they can steal personal and financial information that can be used for multiple fraudulent purposes, according to ITRC.

Consumers who receive this type of message should forward it to the IRS at phishing@irs.gov.

“Always being wary and thoughtful of where you are providing your information and what you are sharing,” Phillips said.

Technology

Hims & Hers faces scrutiny from lawmakers over ‘misleading’ Super Bowl ad

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45 mins ago

February 7, 2025

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Hims & Hers faces scrutiny from lawmakers over 'misleading' Super Bowl ad

The New York Stock Exchange with a Hims & Hers Health banner is pictured in the Manhattan borough of New York City.

Carlo Allegri | Reuters

Hims & Hers is facing scrutiny from lawmakers over what they claim is a “misleading” advertisement for its weight loss offerings that’s slated to run during the Super Bowl on Sunday.

Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) wrote a letter to the U.S. Food and Drug Administration on Friday expressing concerns over an “upcoming advertisement” that “risks misleading patients by omitting any safety or side effect information when promoting a specific type of weight loss medication.”

The Hims & Hers ad, which the company released online in late January, is called “Sick of the System” and sharply criticizes the $160 billion dollar weight loss industry. It shows visuals of existing weight loss medications known as GLP-1s, including injection pens that look like Novo Nordisk’s blockbuster diabetes drug Ozempic.

The ad claims those drugs are “priced for profits, not patients,” and points to Hims & Hers’ weight loss medications as “affordable” and “doctor-trusted” alternatives.

“We are complying with existing law and are happy to continue working with Congress and the new Administration to fix the broken health system and ensure that patients have choices for quality, safe, and affordable healthcare,” a Hims & Hers spokesperson told CNBC in a statement.

The senators do not mention Hims & Hers by name in their letter, but they do reference some of the visuals in the ad, including “imagery of an injection pen with distinctive characteristics reflective of an existing brand-name medication.”

“Nowhere in this promotion is there any side effect disclosure, risk, or safety information as would be typically required in a pharmaceutical advertisement,” the senators wrote. “Further, for only three seconds during the minute-long commercial does the screen flash in small, barely legible font, that these products are not FDA-approved.”

Hims & Hers began offering compounded semaglutide through its platform in May after launching a new weight loss program in late 2023. Semaglutide is the active ingredient in Ozempic and Wegovy, which can each cost around $1,000 a month without insurance.

Shares of Hims & Hers jumped over 170% last year, thanks to soaring demand for GLP-1s. They rose another 8% on Friday, lifting the company’s market cap to about $9.5 billion.

Compounded GLP-1s are typically much cheaper and can serve as an alternative for patients that are navigating complex supply hurdles and spotty insurance coverage. Hims & Hers sells compounded semaglutide for under $200 a month.

The FDA doesn’t review the safety and efficacy of compounded products, which are custom-made alternatives to brand drugs designed to meet a specific patient’s needs. Compounded products can also be produced when brand-name treatments are in shortage.

Semaglutide is currently in shortage, according to the FDA.

Sens. Durbin and Marshall said that advertisements for brand-name GLP-1 medications include “significant risk disclosures to patients about side effects and contraindications, including warnings about potential gallbladder, pancreas, vomiting, diarrhea, and other implications.”

A release on Durbin’s website says that the ad in question appears to exploit a loophole “regarding promotions of compounded drugs by telehealth companies.”

The senators said they believe the FDA may have the authority to take enforcement actions against marketing that could mislead patients, and they plan to introduce new legislation to address regulatory loopholes.

WATCH: New study reveals why patients stop taking GLP-1 obesity drugs

Technology

Trump delays cancellation of de minimis trade exemption targeting China imports

Published

4 hours ago

February 7, 2025

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Trump delays cancellation of de minimis trade exemption targeting China imports

Employees package and sort express parcels at an e-commerce company on Nov. 1, 2024, around the Double 11 Shopping Festival in Lianyungang, Jiangsu Province of China.

Vcg | Visual China Group | Getty Images

President Donald Trump signed an executive order on Friday that puts a pause on his closing of the de minimis trade exemption, a provision commonly used by Chinese e-commerce companies Temu and Shein.

The order states that de minimis will be restored for small packages shipped from China, “but shall cease to be available for such articles upon notification by the Secretary of Commerce to the President that adequate systems are in place to fully and expediently process and collect tariff revenue” on those items.

Trump on Saturday suspended the exemption as part of new tariffs that include an additional 10% tax on Chinese goods. The nearly century-old exception, known as de minimis, has been used by many e-commerce companies to send goods worth less than $800 into the U.S. duty-free, creating a competitive advantage.

It was predicted that its removal could overwhelm U.S. Customs and Border Protection employees, as the mountain of low-value shipments already making their way into the U.S. would suddenly require formal processing.

De minimis has helped fuel an explosion in cheap goods being shipped from China into the U.S. CBP has said it processed more than 1.3 billion de minimis shipments in 2024. A 2023 report from the House Select Committee on the Chinese Communist Party found that Temu and Shein are “likely responsible” for more than 30% of de minimis shipments into the U.S., and “likely nearly half” of all de minimis shipments originate from China.

Critics of the de minimis provision say it’s provided an unfair advantage to Chinese e-commerce companies, and created an influx of packages that are “subject to minimal documentation and inspection,” raising concerns around counterfeit and unsafe goods.

The Biden administration proposed a new rule last September to curb the “overuse and abuse” of de minimis. The rule proposes to strengthen the CBP’s information collection requirements for de minimis shipments.

Technology

Amazon scrubs DEI mention from its annual report

Published

5 hours ago

February 7, 2025

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Amazon scrubs DEI mention from its annual report

A person walks by The Spheres at the Amazon.com Inc. headquarters in Seattle, Washington, on Nov. 14, 2022.

David Ryder | Getty Images News | Getty Images

Amazon has removed any references to diversity and inclusion from its most recent annual report.

The company filed its report for 2024 on Friday following the release of its fourth-quarter earnings. The prior annual report included a mention of “inclusion and diversity” in a section titled “Human Capital,” language that does not appear in the latest filing.

The previous report read, “As we strive to be Earth’s best employer, we focus on investment and innovation, inclusion and diversity, safety, and engagement to hire and develop the best talent.”

Now that section reads, “We strive to be Earth’s best employer,” and says the company relies on “numerous and evolving initiatives to implement this objective.”

The change comes after Amazon recently halted some of its diversity, equity and inclusion, or DEI, programs. Candi Castleberry, Amazon’s vice president of inclusive experiences and technology, told employees in a December memo that the company was in the process of “winding down outdated programs and materials” as part of a broader review of hundreds of initiatives.

Amazon also edited a public-facing webpage that states its policy positions to trim its messaging around DEI issues. Previously, there were separate sections dedicated to “Equity for Black people,” “Diversity, equity and inclusion” and “LGBTQ+ rights.” Those sections were all consolidated into a single paragraph, while any mention of the term “transgender” was removed.