How to protect yourself against tax-related fraud
Imagine filing your tax return only to find that some stranger beat you to it. Sound crazy? It’s actually the latest craze among identity thieves. And right now is peak season.
How can this happen?
Simple. Identity thieves steal your Social Security number (SSN) and use it to file a phony tax return online—usually early in the year, before you've had a chance to file yourself. After you do file, you get a notice from IRS letting you know there's a "problem" with your return, such as:
- A tax return was already filed using your SSN.
- You owe additional tax or have had collection actions taken against you for a year you did not file a tax return.
- IRS records indicate you received wages from an employer unknown to you.
Now you've got a big financial and tax mess on your hands that can take a LONG time to straighten out. So what's the good news? There are steps you can take to protect yourself against this kind of online tax fraud.
Become your own fraud security guard in 4 easy steps
1) Protect your computer.
The internet is the gateway to online identity theft and fraud, so be sure you have good security software. Consider installing a firewall, virus and malware protections, and file encryption for sensitive data. And of course, always use strong passwords and change them often.
2) Learn the latest fraud tactics.
Identity thieves are extremely clever, so it's important to stay one step ahead of them – especially at tax time. Be on the lookout for emails or texts from the IRS. The IRS does NOT use email, texts or social media to request information from taxpayers. And they will never ask for your PIN or credit card information.
Another tactic to be aware of is the use of email links and attachments to launch viruses and other malware. As a rule, you shouldn't open any attachments unless you know what it is and who sent it.
3) Keep your SSN under wraps.
Your SSN is a hot commodity among identity thieves, so be smart about protecting it. Don't carry your Social Security card around with you. And don't give a business your SSN just because it asks—such as a retailer, pharmacy, or car dealership. Make sure it's absolutely necessary.
It's also a good idea to check your credit report and Social Security earnings statement every year-- just to be sure there's been no unusual activity.
4) Safeguard your accounts.
Don't use public hotspots to log into your bank or other financial sites. These hotspots are not secure and leave you wide open to hackers. Also, be sure to log out of sensitive sites when you're not using them to prevent other users from accessing your information.
At home, always check the security of a website before you enter any sensitive information. Look for the padlock icon in your browser and be sure the address begins with "https" which indicates it's secure.
If you see something, say something
Now that tax season is upon us, it's more important to keep an eye out for potential scams. If you receive a suspicious email, report it to firstname.lastname@example.org.
If you suspect a phone, fax or mail scam, call 1-800-366-4484. And if someone is attempting to impersonate an IRS agent, report it to Treasury Inspector General for Tax Administration at www.ftc.gov.
For more tips on how to protect against tax fraud visit identitytheft.gov.