The start of a new year means it is time to compile your financial documents from last year and start getting your tax return ready. With the big identity theft breaches that have happened the past few years with the IRS, especially the widely publicized one last year, it is more important than ever that you take precautions to protect yourself from any fraud associated with your tax return. In the worst cases of identity theft and tax filing, it can impact years of your tax filing and take up to four months to actually resolve. The following tips can help you to avoid falling prey to identity theft scammers trying to make money by filling for a return in your name.
File Early
One way to reduce your risk of being targeted by identity thieves is to file your tax return early. For a fraudster to actually file in your name, they have to be the first to send in a return. If they have your social security number, date of birth, and name, they can file a return. If theirs gets to the IRS before yours, then your return will be rejected and you have to file a special, amended return and go through a process of sorting out the issue with the IRS. If you have already filed, then scammers do not have the opportunity to file a fraudulent return under your name. However, you do need to wait until you have all forms so that you complete an accurate return and do not have to file an amendment later on.
Make Sure You Are Actually Talking to the Real IRS
There are highly sophisticated scammers and phishing schemes that appear as though they are the legitimate IRS. They will call people or send out emails that appear very authentic. Before you give anyone your personal information, always verify that it is the IRS. If they have a link to a website, do not click through the email. Go directly to the IRS website (irs.gov). The IRS will never call you about your account; they handle all communication through letters. They also rarely email you. Any time you are unsure whether a communication is a legitimate letter or email from the IRS, simply find the IRS phone number from the IRS website and call them to verify.
Use a Reputable Tax Preparation Company
If you choose to use tax preparation software, e-file, or hire a tax preparer, make sure you are using a safe and reputable company. You want to e-file with an IRS approved company, as this ensures they have the highest security and encryption levels in place. This again can be found on the IRS website. If you are using tax preparation software, whether from disk or on a website, double check their authenticity and security measures. The main tax preparation software companies, such as Turbo Tax, have agreed to follow new ID theft protection guidelines to combat any fraud. If you choose to use a tax preparer to complete your return, it is also important that you trust them with your information. There are ways to verify they are a professional, including looking for reviews, checking with the BBB, or seeing if they are certified or accredited by any professional organization.
Take Normal ID Theft Precautions
The last thing you can do to protect yourself from having your identity stolen by tax scammers this tax season is to take normal ID theft protection. Shred any receipts or paperwork you do not need, including forms from previous tax years (as long as they are older than three years). Keep your current tax documents in a safe place in your home. Be wary of giving out your social security number and date of birth, especially online. Be careful of how much information you give away about yourself on social media and other digital platforms. You do not have to be paranoid, but it is beneficial to be a little on your guard any time you make any transactions online. This will protect you in general from any identity theft scams.
The IRS is making many efforts to reduce any identity theft for taxpayers, including working with some tax preparers and tax preparation software companies. That doesn’t mean you should not take actions on your own to reduce your own risk.