With the income tax season upon us, the Federal Trade
Commission (FTC) and the Internal Revenue Service (IRS) are warning citizens
about the dangers of Tax ID Theft.
Tax ID Theft occurs when an ID thief files a tax return with
the IRS in someone else’s name to receive a tax refund. The ID thief will have enough
information, such as Social Security Numbers, addresses, etc., to impersonate
someone else on IRS tax forms. Often ID thieves file early to get their fake
returns into the IRS before the person that they are impersonating. The ID
thief gets a refund, and the victim gets a notice from the IRS that his/her
taxes have already been filed.
The key for the ID thief is to have enough information to
file a credible tax return in someone else’s name. ID thieves can collect
information on other people from physical theft or online.
Physical sources can be through lost or stolen wallets, Medicare
cards or smartphones. The ID thief can steal an ID in a home burglary or car
prowl. Your information could be stolen by family, friends, visitors or
advisors. The ID thief can go dumpster diving outside your accountant’s office
or other business that keeps your personal information and does not shred
sensitive documents before throwing them out. Lots of good personal information
can be obtained through mail theft.
Other methods include imposter scams, such as pretending to
be an IRS agent, and “verifying” your Social Security Number and other personal
information. The ID thief could also have contacts inside financial
institutions who can feed him/her with personal information on clients. The ID
thief could also set up a corrupt a tax preparation service that also steals
your personal information.
Online sources of personal information include purchasing
information from data breaches. Phishing or spear phishing can yield personal
information. Phishing is where an imposter sends an email that has attachments
or links that either installs malware or sends the person receiving the email
to a web site that collects personal information. ID thieves can use middle man
attacks on surrounding computers at insecure Wi-Fi hotspots or on peer-to-peer
file sharing networks.
There are warning signs of a possible tax ID theft. If your Social
Security Number is stolen or compromised is one. Another, is an unusual delay
in getting an expected refund from the IRS. The clincher is a notification from
the IRS of a duplicate tax return, unreported income or duplicate dependents.
You can minimize your risk to become a victim of tax ID
theft. Your personal information is part of you. It is valuable no matter who
you are or how much you make. ID thieves don’t care if you are rich or poor,
have good credit or bad credit. Not taking action can harm you.
·
Shred documents with account numbers and other
personal information with a cross cut shredder.
·
Use strong passwords on your accounts and strong
privacy settings.
·
Read your credit reports annually.
·
Empty your purse or wallet. Only take what you
need for that day. Do not keep your Social Security card in your wallet. Keep
it in your safe or your bank’s safety deposit box.
·
Know your tax preparer. Ask them how they secure
your personal information.
·
File your income tax return early, before the
crooks file.
·
When you file,
o
If mailing, take the return to the post office,
not your mailbox.
o
If filing electronically, use a secure network.
o
Store your copy of your returns securely and
shred drafts.
·
Be careful of what you share. If a business asks
for personal information, ask why they need the information. If you receive a
phone call from someone claiming to be from the IRS, your bank, or other financial
institution, wanting to “verify” your personal information, hang up. Be careful
of emails claiming to be businesses that want you to open an attachment or
click on a link.
If you are victimized by a tax ID theft scheme, report it to
www.identitytheft.gov. This site
will help you report the incident to the FTC and the IRS. It will also help you
develop a recovery plan. Also, report it to the Identity Theft Resource Center,
https://www.idtheftcenter.org/.
IRS:
AARP Fraud Watch Network on IRS Imposter Scams:
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