How to Avoid Identity Theft this Tax Season

Posted by on Mar 19, 2020

How to Avoid Identity Theft this Tax Season

Tax identity theft has been on the decline in recent years due mostly to education and outreach, but many individuals, businesses, and tax preparers still fall victim to tax-related fraud every year. This type of fraud can vary from fraudulent tax returns to phishing messages asking for tax information. Last year, there was a spike in phishing messages sent to tax preparers attempting to get client information.

This year, the Internal Revenue Service (IRS) has created Identity Theft Central, a new webpage to help individuals, businesses, and tax preparers prevent tax identity theft and handle it if one does fall victim. The more knowledge you have on these types of scams and fraud, the less likely the scammer will succeed. As we enter the rush of tax season, be sure you know how to avoid identity theft this year.

  1. Be aware of popular scams

Phone scams are one of the most common scams deployed by identity theft fraudsters.  You have likely received one of these fake calls over the years appearing to be from the IRS and demanding money for tax debts. The scammers create a sense of urgency and fear that results in many giving over money or personal information. It is important to remember that the IRS will contact you via letter if there is something wrong with your tax information—not over the phone.

Phishing messages are also a widely used method of scamming taxpayers. These messages may appear to come from the IRS or even your bank or tax preparer. For instance, some consumers reported receiving phishing emails from their tax preparer last year that either asked for personal information or requested that they download an attachment. Again, remember that the IRS will not contact you via email. If you receive something from your bank or accountant, be sure to call and confirm that they really sent it.

  1. Know the signs of tax identity theft

In many cases, you may not realize that you are a victim of tax identity theft until you go to file your taxes and cannot or you are notified by the IRS. If you file your taxes and are told that you have already filed, you must contact the IRS right away.

You may be able to catch the scammer before they complete the fraud by looking out for some warning signs: for example, if you receive a tax transcript in the mail that you did not request or if you are notified of an online account that you did not set up. If this occurs, again you must contact the IRS immediately.

  1. Protect your identity and devices

Certain individuals who have experienced identity theft before or live in a particular state may be eligible for the IP PIN program. This was first introduced a few years ago and acts like two-factor authentication for filing taxes. Once you are assigned a PIN, you (or your tax preparer) will need to enter it before you can file your taxes. Visit this site to see if you are eligible.

Individuals, businesses, and tax preparers all need to protect their devices this tax season—that means mobile phones, computers, and tablets. Individuals should be sure that they are using secure Wi-Fi and devices when filing taxes online or communicating with their tax preparer. Use strong and unique passwords for any sites that contain your personal information and be on the lookout for phishing emails. Tax preparers need to follow the same guidelines and also be sure they are encrypting and protecting client data.

Don’t let this tax season be a win for the scammers! Be on the lookout for scams and when possible, file early, as it reduces your chances of fraud.

 

Source: Savvy Cyber Security February Newsletter

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