PROTECTING YOURSELF FROM TAX-RELATED IDENTITY THEFTBondBeebe
Posting by Brian Wynne
Last week the IRS released its annual “Dirty Dozen” Tax Scams for 2014 as a reminder to be on the lookout for fraud and take steps to protect sensitive information as you file your taxes. Not surprisingly, identity theft tops this list.
Tax-related identity theft continues to grow – last year 1.6 million Americans were victims within the first half of the year. It is essential to be on the lookout for scams and take the necessary precautions with your social security number and other personal information.
My colleague John Merchant wrote an insightful post last year regarding this issue, detailing how these schemes often work. Once a criminal has your social security number, he/she will file a tax return showing an overpayment of tax, and then pocket the refund.
How do you know if you have become a victim of tax-related identity theft? If you received a notice that you have filed more than one return, it is possible that your information has been compromised. IRS notices may also uncover identity theft from other sources. If your social security number has been compromised and used to obtain a job, a company that does not employ you may report income that is attributed to you, triggering a notice from the IRS that you have failed to report all of your income.
Preventing Tax-Related Identity Theft
Obviously the key to prevention is protecting your social security number. While data breaches are making this increasingly difficult, here are 3 steps that you can take to protect yourself:
Click Carefully. The IRS will never initiate contact via e-mail and will never ask for sensitive information, like your social security number, via e-mail. It’s also important not to click on any links from suspicious e-mails – malware can be used to infect your computer and extract personal information.
Beware Telephone Scams. This year’s Dirty Dozen report notes an increase in phone scams, where the caller claims to be from the IRS and will ask for sensitive information regarding your taxes. These criminals may even be able to recite the last four digits of your social security number.
If you receive a call saying that you owe money, and you do not have a reason to believe you owe taxes, you can report the incident. If you do owe taxes, call the IRS and they will be able to provide the correct guidance.
Shred it. Shred any document that contains your social security number. Many communities hold shredding days, and you may find it valuable to invest in a shredder for your home.
The IRS has provided resources at http://www.irs.gov/uac/Identity-Protection to help taxpayers prevent and troubleshoot tax-related identity theft. This tax season – and throughout the year – be cautious and vigilant in order to protect your personal information and prevent identity theft.