Identity theft is of particular concern during tax season, when thieves use stolen Social Security numbers to file fraudulent tax returns and claim refunds.
Unfortunately, if this happens to you, you likely won’t know it until you file your tax return.
The IRS will deny your return if someone has already filed one in your name. You’ll find out immediately if you file online, or in writing if you file by mail. Filing your taxes as early as possible may help reduce the chances of someone else filing a return in your name.
How to Avoid Becoming a Victim
First, protect your Social Security number. It’s your most important piece of personally identifiable information. Keep your Social Security card in a secure place (not in your wallet). Give out your Social Security number only when absolutely necessary. Destroy any documents containing your Social Security number or other personal data.
Be mindful when using technology. Don’t open attachments in e-mails unless you know who sent it and what it is. Use security software and strong passwords. Only transmit personal information over secure networks (not public Wi-Fi) through encrypted websites (URLs starting with “httpsâ€).
Also, learn to recognize “phishing†attempts. One common scam involves fraudsters posing as representatives of the IRS to solicit personal information over the phone or via e-mail.
Identifying E-Mail and Phone Scams
The IRS will not call or e-mail you to request sensitive information or threaten you with jail or lawsuits. If you owe taxes, the IRS will typically first mail you a paper bill.
If you receive a suspicious IRS, U.S. Treasury, or tax-related e-mail, do not open any attachments, click on any links, reply to the sender, or take any other actions that could put you at risk. Instead, report the e-mail by saving it and sending it as an attachment to phishing@irs.gov.
Regarding phone calls, keep in mind that the IRS and its authorized collection agencies will not:
- Leave pre-recorded, urgent, or threatening messages on your answering system
- Threaten to immediately bring in local police or other law enforcement groups to arrest you for not paying
- Call to demand immediate payment with a prepaid debit card, gift card, or wire transfer
- Ask for checks made out to third parties
- Demand payment without giving you an opportunity to question or appeal the amount owed
If you receive a suspicious call, report the number to the IRS by e-mailing phishing@irs.gov. Be sure to include “IRS Phone Scam†in the subject line.
If You Become a Victim of This Fraud
The first step is to alert the IRS. Complete an IRS Identity Theft Affidavit (Form 14039), attach it to your paper return, and mail it to the IRS according to instructions. The IRS recommends that you continue to pay your taxes and file your tax return, even if you must do so by paper. To protect yourself and prevent your personal information from being used to commit other crimes, be sure to take some additional steps. Contact one of the three major credit reporting bureaus – Equifax, Experian, or TransUnion – to place a fraud alert on your credit records, and file a complaint with the Federal Trade Commission at identitytheft.gov. Protecting yourself from tax-related fraud takes vigilance, but it’s definitely worth it.
FOOTNOTE: Article provided by Bryan A. Ruder CFP®, MSPFP, CRPC™, AWMA™, AAMS™, AIF®, MPAS™, a First Vice President/Investments with Stifel, Nicolaus & Company, Incorporated, Member SIPC and New York Stock Exchange, who can be contacted in the Evansville office at (812) 475-9353.
