During tax season, consumers must be extra vigilant with their personal information. Each year the IRS compiles a “Dirty Dozen” list detailing the most common tax scams of the year. Identity theft continues to make the list year after year.
Tax identity theft occurs when someone uses a stolen social security number to file a tax return and collects that taxpayer’s refund. These criminals may also gain employment, report income to the IRS, or claim your child as a dependent using your stolen personal information. Thieves obtain information by impersonating the IRS or other financial institutions, stealing wallets or mail, collecting personal documents from trash receptacles, email scams, and data breaches. This type of identity theft may result in lost refunds or the IRS taking collection action against you.
Unfortunately, you may not realize your identity has been compromised until you file your tax return. The following situations may indicate that you are a victim of tax identity theft:
It is critical to take preventative measures to safeguard your identity and avoid tax scams. Apply the following precautions:
File your tax return as soon as possible. Though filing early is not a guarantee against tax identity theft, it may prevent a thief from filing before you do.
Always protect your personal information. Keep sensitive documents, such as W-2s, your social security card, and filed tax returns in a secure location. Do not carry any of these documents on your person, especially your social security card, rather keep them in a safe place.
Properly dispose of tax documents. If you need to throw away old documents, be sure to shred all papers with personal identifiers.
Be careful when giving out information. Do not post personal details on social media, especially your address, birth date, credit card information, or social security number. Be wary of entering information online. If you do enter sensitive information, make sure you are using a secure network and the website has an “https” address.
Protect your computer. Keep anti-virus and malware protection software up to date to prevent hackers from accessing your information. Create strong and unique passwords for all of your accounts.
Be wary of tax scams. If you receive angry or threatening phone calls from the IRS, your bank, or any other financial institution, verify that is not an impersonator before giving out personal information. The IRS will never threaten you with police action. If you receive a suspicious phone call or email, contact the IRS directly. Be careful when checking emails. Do not download files or click on links from unknown sources.
Report and respond to tax identity theft as soon as possible by taking the following steps:
The IRS is continually striving to increase security measures and prevent identity theft. However, it is important to take precautions and be aware of scams. Safeguarding your information and looking for warning signs is the best way to protect yourself.
Written by BestCompany.com.
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