Are you ready for tax season? You may not be.
There is a growing concern every tax season called tax identity theft that’s so high the FTC has set aside January 29 to February 2 as Tax Identity Theft Awareness Week. It’s time to pay attention.
What is tax identity theft?
Tax identity theft is committed when a criminal files a tax return in your name, with the hopes of stealing your refund. Even if you don’t regularly receive a refund from the IRS, you can still potentially fall victim because the information used is usually not taken from your legitimate income forms.
Tax identity theft costs the government millions every year. These scammers in possession of stolen names and Social Security numbers frequently created fraudulent W-2s and other forms in search of their speedy refund. The IRS reported there were over 1.5 million illegitimate tax returns filed in 2015 alone.
More recently, $227 million were claimed last year in deceitful refunds. This creates an enormous burden on the government. Last year alone, it resulted in more than $46 million in losses. What’s even worse, when a fraudulent claim is made, the legitimate return is denied and can’t be accepted until the fraud is alleviated, hurting innocent taxpayers.
Here are some common methods criminals use to get your information:
- They dig through trash cans and dumpsters to search for bills, and whatever documents they can find with sensitive information on it.
- They call or emailing people you know and fool them into disclosing personal information.
- They often pose as a legitimate licensed tax preparer and call you trying to access your personal information.
How to protect yourself
You can protect yourself against tax identity theft by following these simple tips:
File tax returns as early in the tax season as you can.
- Always use a secure internet connection when filing electronically. Do not use unsecure, publicly available Wi-Fi hotspots.
- Always mail tax returns directly from the post office and never from your home.
- Always remember that the IRS will never initiate first contact by email, phone, text or social media.
- Respond to all mail from the IRS as soon as possible.
- Shred copies of your tax return, drafts, or calculation sheets you no longer need.
- Seek out trusted reviews and BBB ratings, thoroughly before using a tax preparer.
- If your Social Security number has been compromised, contact the IRS ID Theft Protection Specialized Unit at (800) 908-4490.
- Check credit reports for free at AnnualCreditReport.com to make sure no unauthorized accounts are opened in your name.
Remember, tax identity theft is a big deal. It not only creates an enormous hassle and potentially long-term hassle for you, but it also continues to burden the government. During the first half of 2017 there were 791 separate data breaches alone.
If you or someone you know is the victim of Tax Identity Theft, contact the IRS immediately online or by phone 1-800- 908-4490.
Further, if you’re contacted by someone saying they’re the IRS, report the fraud. Send a copy of your police report or an IRS ID Theft Affidavit Form 14039 and proof of your identity (this can be your Social Security card, driver’s license or passport). Then update your files immediately and keep accurate records of the dates you made calls or sent letters. Protect yourself.
Don Markland is the Chief Revenue Officer for Tax Defense Network, a leading tax resolution company that helps more than 10,000 customers a year manage and solve their tax debt problems with the IRS.