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How Do I Prevent Tax Related ID Theft?

January 26, 2016

Taxpayers are most vulnerable to identity theft early in the tax season. Identity thieves attempt to file a fraudulent tax return before their victim has a chance to file one. Identity theft is the top complaint the Federal Trade Commission (FTC) has received. In 2013, about 43 percent of identity theft complaints received by the FTC were regarding tax returns.

Preventive Actions

To prevent your information from being used for tax related ID thefts, use the following measures:

  • Don’t share your Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), bank account numbers, PINs, filing status, or date of birth with unreliable sources.
  • Secure data on your computers by using firewalls and anti-virus software.
  • Keep your financial and tax documents in a safe place at home.
  • Don’t share your tax, financial and personal information over the phone, through mail, text messages, or social media sites.
  • Check your credit card report frequently, preferably every 12 months.
  • Frequently change passwords for important financial and tax-related online accounts.
  • Use IRS online services for return filing and preparation, paying taxes, checking the status of your refund, etc.

If you need to talk to your bank, the IRS or any other organization regarding a message you received, don’t respond to the message. Instead, call the institute on the number that you have obtained from a reliable source such as their website, or an old notice or letter.

Taxpayers can expect to receive unsolicited scam communications through any of these methods: email, phone, text messages on the phone, social media messages, and personal visits. If you receive such communication, never respond immediately. Refuse to share sensitive information and end the communication.

IRS’ Efforts

Judging from the number of false returns filed each year, a large number of taxpayers fall victim to scammers. For 2011, the Treasury Inspector General for Tax Administration (TIGTA) reported that approximately 1.5 million tax returns filed were ID-theft related.

Even though the IRS has enhanced their security methods to combat tax-related ID theft, the agency has limited resources. Taxpayers should take every measure to protect their information all through the tax season.

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