TAX IDENTITY THEFT- Protect Yourself from Identity Thieves

In a Twitter chat (#IDTheftChat) held earlier today, participants revealed that there has been a 50% increase in ID theft complaints to the Federal Trade Commission (FTC) in 2015, largely due to tax refund fraud. According to a FTC representative, the FTC received almost 500,000 ID theft complaints in 2015. 45.3% of those complaints were tax fraud related.

During the chat, hosted by the FTC and the Identity Theft Resource Center, experts gave out information about tax identity theft, how to protect yourself from it, and what to do if you become a victim.

Detecting if you have been victimized can be difficult for the average citizen. Often the only way that you might know that you have been victimized is a notice from the IRS that you have already filed your income tax, or possibly an IRS notice asking for information about unreported income. If you regularly check your information about your credit with the three major credit reporting agencies (TransUnion, Equifax, Experian) you might see accounts that you do not recognize.

Their recommendation if you discover that you have become a victim of tax identity theft is to go to  https://www.identitytheft.gov/. The web site will ask for information about what happened to you. This information will automatically be added to the FTC database on identity theft. Then it will help you to put together a recovery plan. For those people who create an account with the website, it will walk you through your recovery steps, update your plan as needed, track your progress and even pre-fill forms and letters for you.

Another resource that can help you is the Identity Theft Resource Center (ITRC). If you want to talk to someone you can call ITRC at (888) 400-5530) for free assistance. ITRC also has a web page dedicated to tax ID theft at http://www.idtheftcenter.org/taxidtheft.html.

Some ways that you can guard against tax ID theft include:

·         If at all possible, file your taxes early.

·         Take advantage of your free yearly check of your credit with the three credit reporting agencies. One good strategy is to check one of the credit reporting agencies every 4 months. That way you can check your records with one of the credit reporting agencies early in the year, then a second agency toward the middle of the year, and then with the third agency at the end of the year.

·         Be sure to shred any documents that have sensitive account information, account numbers, or your Social Security Number. The best shredder for this is a micro cut shredder which is impossible to piece together.

·         When filing your tax return, if you file by mail take it to a post office. If you file electronically, use a secure connection (for example your own secure internet connection) not public Wi-Fi.

·         Never carry your Social Security card in your wallet or purse.

·         Be careful of who you choose to be your tax preparer. The IRS has a web page with a searchable database to help you find a preparer at http://irs.treasury.gov/rpo/rpo.jsf.

·         Be careful of spear-phishing as described here https://t.e2ma.net/message/kav78/0uxrbnd

·         Do not give out your personal information when you receive an unsolicited email or phone call asking for that information.

·         Remember; if anyone calls you or emails you claiming that you owe back income taxes and/or fines and demands immediate payment, hang up!

 

Krebs on Security:

http://krebsonsecurity.com/2016/01/ftc-tax-fraud-behind-47-spike-in-id-theft/

 

FTC:

http://www.consumer.ftc.gov/

 

ITRC:

http://www.idtheftcenter.org/