Is it safe to file your taxes online?
by Erin Earley - Lavasoft - Friday, 26 March 2010.
Tax season. It’s not a favorite time of year for most people, but the deadline for filing income taxes for many countries is quickly approaching. And, especially in areas of the world where e-filing is popular, we can expect to see a boost in the efforts of cyber scammers to take advantage of the swell in online activity and the handover of personal information.

In the United States, the Internal Revenue Service (IRS) has, in recent years, encouraged tax payers to file electronically. More Americans are now filing their returns online than ever before. When IRS e-file, the popular electronic tax return delivery service used by two-thirds of the nation’s taxpayers, opened for business for this tax season on January 15, it marked 20 years of transmitting nearly 800 million individual federal tax returns, according to the IRS. Last year, 66 percent of all returns filed used the e-filing service.

What are the advantages of filing electronically – and, most importantly, is it safe? According to the IRS, and the millions who successfully file online, the answer is yes.

“Electronic filing is more and more popular every year, and most taxpayers now e-file. IRS e-file means faster refunds. It means the option to file now and pay later if you owe additional tax. It means peace of mind knowing the IRS received the return because we send an acknowledgement. Those are the reasons this has been a popular service,” says IRS Commissioner, Doug Shulman. “IRS e-file is safe, it’s easy and everyone should try it.”

The IRS claims that taxpayers who file online have a reduced error rate: one percent compared to nearly 20 percent with a paper return. It goes on to say that federal tax returns are delivered to the IRS through a “highly secure, encrypted transmission system” and that, just as with paper returns, e-filed returns are confidential.

But, don’t let your guard down just yet! While e-filing, in itself, may be safe, it’s important to remember that every time you or a family member goes online, you’re exposed to certain privacy and security risks. Cyber scammers look for any and all opportunities when you’re more susceptible to their malicious tricks. And tax season is one of these opportunities.

If you’re planning to use the Internet to e-file tax returns – or even to prepare your information for yourself or your accountant using online tools – remember that your files contain personally identifiable information; in the hands of the wrong person, it's more than enough needed to steal your identity.

There are a number of safety precautions you can and should take to decrease your chances of running into a security issue, or of leaking your financial information and personal details to a hacker or phisher. Keep reading to learn how to prepare yourself and how to prepare your PC.

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