You may not think about filing your taxes until April, but trust me, you should do it sooner rather than later! If you don't, you may become one of an estimated 226,000 taxpayers who became the victim of tax refund fraud last year. Crooks count on the millions of taxpayers who wait until that April deadline to file, providing them with a "window of opportunity" to file YOUR taxes and collect YOUR return!
How Tax Fraud Happens
A suspect fraudulently obtains your name, social security number and date of birth. After confirming that the social security number has not yet been used to file a tax return, a suspect files through an online tax preparation service. YOUR tax refund is then issued to the crook by check, direct deposit or a preloaded card.
Tax Fraud in the News
If you think this can’t happen to you, look what happened to more than 400 police officers and firefighters in Florida last spring. Recently, the IRS and Department of Justice announced results from their crackdown on the potential theft of thousands of identities and taxpayer refunds as part of a stepped-up effort against tax fraud and identity theft.
How to Protect Yourself
The good news is there are ways to protect yourself from identity theft and ultimately tax fraud.
- If you file your taxes online, make sure that your spyware and anti-virus software is up to date.
- If you file your taxes by mail, make sure you drop it in a mailbox inside the post office. Never leave it with outgoing mail at work or at home.
- Conduct due diligence prior to hiring a tax preparer.
- Don’t use email to send tax documents to anyone unless the email is encrypted.
- Buy and use a cross cut shredder for ANY document that contains personal information.
- Never give out your personal information (especially your social security number) over the telephone, even if the caller claims to be from the IRS. Hang up immediately and contact the IRS directly.
- Ignore any email that you receive purporting to be from the IRS. The IRS does NOT communicate with taxpayers via email.
- For additional tips, visit the IRS here
If you think that you have been the victim of a tax refund fraud, contact the IRS-Identity Protection Unit by calling 1-800-908-4490 or visit them online for more information. There are several reasons not to procrastinate doing your taxes, potential tax fraud shouldn’t be considered just one more on a long list, it needs to be at or near the top of that list. If you have additional ways to avoid being a victim of tax fraud, we’d love to hear them in the comments below.