23 Feb Tax Time Can Get Worse…
We’ve all heard horror stories about the ramifications of identity theft, and some of us may even have first-hand experience dealing with the consequences. Having your identity stolen can have a lasting impact, and is most certainly a stressful event.
One potential outcome of having your identity stolen is Tax-related Identity Theft. This is when criminals use your stolen identity (Social Security Numbers or Tax ID Numbers) to file fraudulent tax returns in your name. These types of scams impact not only your personal taxes, but can also affect your businesses tax situation.
The IRS has made significant strides in preventing tax-related identity theft, but the fraud persists. In 2015 the FTC reports that tax fraud represents 45% of all identify theft complaints. And, the IRS reported fraudsters collected an estimated $5B in bogus refunds in 2013 (more recent numbers are hard to confirm).
Taking a few steps should allow you to enjoy your weekends and avoid falling victim to Tax-related Identity Theft. Here are 8 steps the avoid tax-related identity theft and what to do if you have fallen victim.
- File early. File as soon as possible so a scammer can’t beat you to it with your stolen information.
- Watch for IRS scams. Beware of emails, calls and text messages pretending to be from the IRS. Scammers will try to wrangle your personal and sensitive information to impersonate you.
- Mail missing? Keep an eye out for missing mail. Scammers look for W-2s, tax refunds or other mail that contains your personal information. If your employer sent out your W-2 and you didn’t receive it, or it looks like it was tampered with, contact the IRS.
- Choose a preparer. Find a tax preparer you can trust. Ask friends, family and colleagues for recommendations.
- One more thing on preparers. You should always meet whomever is going to prepare your return before they prepare your return.
- Shred and store. Once you’ve filed your return, shred the documents you don’t need and securely put away the ones you do.
- Use a secure mailbox. Don’t put your completed tax return in your mailbox for delivery where a thief can find it. Bring it to the post office or drop it at an official postal box.
- Protect your network. Make sure your WiFi network is protected with a password to keep the hackers away. Avoid filing your taxes over open networks, such as at the local coffee shop.
More information can be found on the IRS’ website. This includes what to do if you had your identity stolen or you believe your taxes have been filed fraudulently.
Identity Protection – IRS
Report Tax Fraud – IRS