Tax Scammers and AI: Are You at Risk? - AITechTrend
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Tax Scammers and AI: Are You at Risk?

Last year, IRS Criminal Investigators uncovered over $5.5 billion in tax fraud. However, cybersecurity experts are concerned that artificial intelligence (AI) will exacerbate the situation this year.

Source: YIMG.com

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Haywood Talcove, CEO of LexisNexis Risk Solutions for Government, stated, “You have no idea who is using your identity.”

LexisNexis showed us posts from the dark web that they claim were gathered by Georgia State University’s criminology director David Maimon. These posts were made by fraudsters who demonstrated how they applied for tax refunds using stolen passports, IDs, and personal information.

Talcove noted, “The problem is that the ability to generate fake licences is now widespread, and the human eye is not accustomed to this technology.” One of the things taxpayers should be concerned about is someone breaking into these tax systems that use this technology and identifying a target.” He warns that artificial intelligence can allow criminals to fabricate images and videos in order to mislead identity verification systems.

Source: Sinclairstory.com

“Once you’ve been validated, especially by those third-party-credentialed providers, you can get into the IRS, you can get into some private sector organisations, you can get into a lot of places,” Talcove added.

Nicholas Rice of IRS Criminal Investigators cautions taxpayers to be wary of unscrupulous tax preparers who promise a greater refund. “There shouldn’t be a drastic swing in your refund if you’re a W-2 wage earner,” Rice said.

He recommends taxpayers to set up direct deposit for refunds. He presented the cases of Benjamin Thomas, 38, of Richmond, Texas, and Whitley Rachelle Carter, 33, of Houston. They were recently convicted of stealing a Houston couple’s over $3 million tax refund via paper check from the mail. “A $3 million Treasury check that was stolen and deposited into accounts that he had access to,” Rice went on to say. “Mr. Thomas was arrested driving a stolen Lamborghini,” he went on to say.

The United States Treasury has stated that it is also employing artificial intelligence to combat identity theft, recovering $375 million last year through an expanded fraud detection mechanism.

The IRS also confirmed that it employs software called ID.me to verify IDs.

We contacted ID.me to learn how the company is responding to scammers who use artificial intelligence to build phoney photos. They sent us this statement:

“Safeguarding our identity verification process from scammers is a top priority at ID.me. In short, ID.me‘s verification technologies and oversight guidelines prevent scammers’ fake images from going through. From a human capital perspective, ID.me employs some of the best engineers, data scientists, and fraud investigators to ensure a safe and fortified identity verification process. Together, these elements fuse to build and deliver privacy and security controls that protect people and institutions from being victimized. ID.me also works to stay at the forefront of emerging identity verification practices and technologies. ID.me leverages several approaches including supervised machine learning (ML) and artificial intelligence (AI) to identify fraud and synthetic identity theft.

“As an example of how ID.me combats fraud, states credit ID.me with successfully preventing hundreds of billions of dollars of fraud during the pandemic. California reported “stopping over $125 billion in attempted fraud by deploying a new identity verification system, ID.me.” 

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Here are some ideas from IRS Criminal Investigators to help you avoid tax fraud:

File your taxes as soon as possible.

Open your IRS account online so a scammer cannot open it for you.

You can now obtain a PIN number, which will serve as a supplementary password to protect your account.

To receive your refund, use direct deposit.

The IRS will only send you a letter in the mail.

Do not provide personal information to any calls, texts, or emails claiming to be from the IRS.

To summarise, the growth of artificial intelligence has created new hurdles in combatting tax fraud, with scammers using modern technology to exploit holes in identity verification systems. However, initiatives by government agencies and cybersecurity organisations to use AI-powered fraud detection systems provide some optimism in the ongoing fight against fraud. To avoid being a victim of scams, taxpayers must remain attentive, file taxes on time, and use security measures such as direct deposit and identity verification PINs. Individuals can lower the danger of identity theft and financial loss by remaining educated and taking proactive precautions, resulting in a safer tax-filing process for all.