It’s crunch time for filing individual tax returns, which means tax-related identity theft is on the rise. Each year, more and more scammers plan to steal personal information of taxpayers to file a fraudulent return or claim a refund. Protecting yourself and your loved ones from tax-related identity theft is vital, and below are four tips and steps you can take.
1. Know How the IRS Will Contact You
Some scammers will impersonate the IRS via email, text or social media to get ahold of personal information. If you’re suspicious of correspondence you receive from someone acting as the IRS, know that the IRS will NEVER:
- Initiate contact with taxpayers by email, text or social media to request personal or financial information
- Call taxpayers with threats of lawsuits or arrests
- Call, email or text to request taxpayers’ Identity Protection PINs
The IRS has an Identity Theft Central full of information, with videos and resources around
protecting your personal information and how the IRS combats identity theft.
2. Get an Identity Protection PIN Through the IRS
This year, the IRS is helping keep tax return information secure by establishing an Identity Protection PIN program. The Identity Protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number. The IP PIN is known only to the taxpayer and the IRS and helps verify identity when filing electronically or via paper tax return. Starting in 2021, taxpayers may voluntarily opt into the IP PIN program as a proactive way to protect from tax-related identity theft.
3. Keep an Eye on Your Social Media
Social media is a growing hot spot for identity theft. In an age where almost everyone is on some sort of social media platform, it’s important to remember online security best practices so scammers can’t take advantage of you. Be aware of the personal information you share on social media, even if you believe you’re sharing privately to friends. Make sure you’re using strong, complex passwords for all social media sites. Passwords should be unique and at least 12 characters long with capitalization, numbers and symbols.
4. Work with a Secure Firm
Working with a reputable CPA firm that focuses on data security can be a much safer option than filing yourself. Seek out a firm that has multiple layers of security to protect your data, including:
- Multi-factor authentication on all devices so client information doesn’t end up in the wrong hands
- Website begins with “HTTPS” showing that the site is encrypted for security purposes
- Modern encryption technology to protect tax returns
- Works with trusted vendors
- Offers secure electronic filing on trusted software and trusted networks
Warning Signs of Tax-Related Identity Theft
You may not know you’re a victim of identity theft until you’re notified by the IRS of a possible issue with your return, but it’s important to be proactive. Here are some warning signs that someone is filing a fraudulent return on your behalf:
- You get a letter from the IRS about a suspicious tax return that you did not file.
- You can’t e-file your tax return because of a duplicate Social Security number.
- You get a tax transcript in the mail that you did not request.
- You get an IRS notice that an online account has been created in your name.
- You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
- You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
- IRS records indicate you received wages or other income from an employer you didn’t work for.
The tips above can help protect against tax-related identity theft, but it’s important to keep data protection top-of-mind throughout the year. Anders stays at the forefront of cybersecurity and data protection best practices year-round, and the security of our client information is a main focus every day. Contact an Anders advisor below or learn more about Anders Tax Planning and Compliance services.All Insights