Every year, tax season presents a seasonal opportunity for criminals seeking monetary gain from identity theft. There are many ways that scammers may try to obtain personal information, but the end goal is to file a falsified tax return in the taxpayer’s name and claim a tax refund. The scheme may not be discovered until the taxpayer attempts to file a legitimate tax return, by which time the criminal has moved on.
Clearing up issues related to identity theft and fraudulent tax returns can be messy and significantly delay any tax refund you may be owed. It pays to protect your identity now. Here’s how to help avoid tax identity theft this year.
1. Do Your Taxes ASAP
By now, you should have all the documents you need to file your tax returns. Employers are required to submit W2s and 1099s by Jan. 31. If you haven’t already, you should gather everything you need and start preparing your tax return so you can submit it as early possible. If you work with a tax preparer, make an appointment to prepare your return now.
Once you’ve filed your tax return to the IRS with your Social Security number (SSN), criminals will be unable to file under your name. The earlier you file your tax return, the less time criminals will have to file a fraudulent return in your name.
This year, the IRS has pushed back the start date for filing your tax returns to Feb. 12. To avoid delays in processing, the IRS has recommended against filing paper returns whenever possible.
2. Avoid Scams and Phishing Attempts
If you receive any unexpected communications claiming to be from the IRS or other official organization, don’t assume they are real. Criminals may impersonate legitimate organizations to request information including your name, birth date, address, employer and SSN. Don’t open any unsolicited email attachments, click any links or provide any information without verifying the source.
3. Report Red Flags to the IRS
There are many red flags that indicate you may have been targeted for identity theft. If you see any of the following warning signs, you should reach out the IRS immediately:
- The IRS contacts you about a duplicate return.
- You receive correspondence regarding wages from somewhere you never worked or other information that seems suspicious or inaccurate.
- You receive an unexpected notice that additional taxes are owed, your refund will be offset or you are in collections for a year you did not file taxes.
- You have any additional reasons to believe your identity has been stolen.
4. Protect Your Data
Take steps to protect your data, including your SSN and other personally identifiable information. Keep paper records in a secure place and dispose of them safely when you no longer need them. If you keep records on your computer or in the cloud, make sure they are password protected.
If you need to send documents to a tax preparer, send them securely. Before hiring a tax preparer, do your research and ask what measures they take to protect client information.