Combat the growing trend of tax identity theft

Tax identity theft – when criminals use stolen personal information to file fraudulent tax returns, typically online, and receive a taxpayer’s refund before he or she files – is on the rise. Since 2010, approximately 3 million taxpayers have fallen victim to tax identity theft. In 2013, the IRS sent $5.2 billion to fraudulent filers.

Victims of tax identity theft can sometimes face several months or even years resolving the issue, resulting in significant delays in receiving their tax refund or filing their return. They also may face substantial paperwork and long interactions with government and legal authorities. Taxpayers may be responsible for proving that the return and income documents are fraudulent. Further, the taxpayer’s information may be at risk for other forms of identity theft.

The good news is that taxpayers can help protect themselves from tax identity theft by practicing simple measures to keep their personal information private and secure.

1.   Secure personal information

  • Do not carry a Social Security card in a wallet.
  • Do not give out a Social Security Number (SSN) on the phone or in a public place.
  • Do not send a SSN or date of birth in an email or a text.
  • Do not share an online user ID, password or PIN with others. Do not leave this information anywhere someone else can easily see or gain access to it.
  • Avoid easily guessed or common names and numbers for passwords and PINs. Change passwords regularly.
  • Close unused credit-card accounts and destroy the credit card.
  • Use a shredder for documents containing personal information.
  • Request a copy of a credit report and keep tabs on who might be accessing it.

2.   Beware of scams

  • The IRS will never email or connect on social media to request personal information.
  • The IRS will never call to demand immediate payment or ask for credit or debit card information over the phone.
  • The IRS will never require specific payment methods.
  • The IRS will always contact taxpayers by mail first about taxes owed.

However, even these methods may not prevent criminals from getting and using a taxpayer’s information. Taxpayers who are concerned about tax identity theft and want to take additional measures to minimize their risk of identity theft may want to investigate establishing an IRS Identity Protection PIN (IP PIN). The IP PIN will make it more difficult for thieves to file a fraudulent return using that individual’s tax identity. 

Reynold Alabre is a Sr. Accountant and a Tax Advisor at H&R Block. He’s the Owner of the Rey Group, and a member of the BRBC in Bridgeport. Rey has been providing expert tax advice and preparation support for taxpayers for over a decade.

Rey Alabre’s contact info is listed below for more information.

Office Address: Bridgeport H&R Block 1375 Madison Ave. Bridgeport CT 06606

Office Phone Number: 203-908-3309