More than 42,000 falsified tax returns claiming $227 million – those are the IRS’ numbers from 2016.
Those numbers increase every year. Don’t become part of that increase by having scammers steal your identity and file a fraudulent tax report in your name.
When a crook steals your Social Security number and files a fake tax return, it constitutes tax ID theft.
Also popular with scammers is the practice of using someone else’s Social Security number to earn wages that are then reported as the victim’s income. Suddenly the victim owes a bunch of taxes that they were unaware of. This is called employment-related tax identity theft.
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Another favorite tactic of scammers is claiming someone else’s children as dependents. Even the deceased can be victimized, as scammers will use that person’s information to claim a tax refund.
The Better Business Bureau has compiled information to help consumers battle the growing threat of taxpayer identity theft. Decrease your risk of being victimized by following these tips:
▪ The number one way to protect your taxpayer ID from fraud is by filing your taxes as early as you can. That means as soon as you get your tax documents from employers, it’s a good idea to file your tax forms electronically. That way you beat scammers to the draw.
Many of us wait until the last minute to file, especially if we owe money. Avoid procrastination and file as soon as possible.
▪ Always be careful when sharing personal information like your Social Security number. Don’t give it out to anyone you do not know. If you are asked by someone to do so, be aggressive about questioning them.
Again, if you don’t know them, don’t always trust their answers. Err on the side of caution.
▪ Safely dispose of documents with your personal information on them. That means using a micro-cut shredder whenever you can to destroy them.
▪ Always keep security software like anti-virus protection and firewalls on your electronic devices updated.
▪ Never use public servers to file your taxes, as they are not secure.
▪ When mailing your tax forms to the IRS, use only secure postal boxes, not your household mailbox. At tax time thieves check home mailboxes for tax forms.
▪ Research your tax preparer. Do an internet search by entering their name and words like “complaints” and “reviews.”
▪ Check out your tax preparer at bbb.org to find out whether they have a record of satisfactorily resolving any past issues with customers.
What if there’s a problem?
In the event that the IRS contacts you by letter, call the IRS immediately to inquire about it. Remember that calls and e-mails you may receive claiming to be regarding tax issues are phony.
The IRS never contacts taxpayers by phone calls or e-mails, but always uses old-fashioned mail for such purposes.
If you find ID thieves have victimized you, take action as soon as possible.
▪ Notify the IRS at once.
▪ Put a fraud alert on credit cards and bank accounts.
▪ Request credit reports to check for unknown transactions.
▪ Contact the Federal Trade Commission and create an identity theft report.
▪ Go to identitytheft.gov to develop a recovery plan.