Preventing Tax Identity Theft
One of the fastest growing forms of identity theft crime is tax identity theft, as data from several industry sources show. The FTC noted a dramatic increase in identity theft complaints in general, but also found that the number of tax identity theft complaints made up almost half of those reports.
Why is tax identity theft on the rise? There are a number of reasons, possibly stemming from the fact that it’s fairly simple to do, doesn’t always require any technological “hacking” know-how, and is a somewhat anonymous crime. Even if the criminal’s attempt at filing a false tax return and stealing a fraudulent refund is unsuccessful, there’s little chance that he’ll be caught.
Fortunately, the IRS and consumer safety experts have identified some key factors that can help lower your chances of becoming a victim:
- Safeguard your Social Security Number – You probably already know not to carry your SSN card around with you in case of loss or theft. But if there is not a specific reason for you to share your actual number with a business, organization, or other individual, DON’T. In many cases, the forms we fill out request that information, but even the business doesn’t know why they need it or what they plan to use it for. One parent who spoke to the Identity Theft Resource Center even reported that her child’s summer camp form requested the child’s SSN.
If an entity cannot tell you why they need your number and how they plan to protect it, don’t share it.
- If you’ve already been a victim… – Unfortunately, the record numbers of data breaches over the past few years means that a lot of consumers’ information is already floating around the internet, ripe for a scammer to steal. If you know you’ve been the victim of a hacking event, data breach, or identity theft, reach out to the IRS to report it with this form.
The IRS is also working on providing victims of identity theft with a series of safeguards that will help them file their tax returns by requiring additional identity proof.
- Be aware of scams and fraud attempts – One of the most important things you can do to protect yourself from any form of identity theft is to know how to recognize a scam, phishing email, or other fraud attempt so that you can avoid it. Since scammers are becoming more aware and more sophisticated in their tactics every day, a good rule of thumb is to never give out your information to anyone who contacts you, no matter why they claim to need it.
If you’re ever asked for your personal identifiable information, especially if a caller of email asks you to “update your account information” or “verify your account information,” hang up or delete the email immediately. Then, reach out to the company the person claimed to work for directly using a genuine phone number; first ask them if everything is okay with your account, then report to them that someone claiming to work for the company tried to get your information.
These steps are only the beginning when it comes to protecting yourself from tax identity theft and other forms, but they’re a good start. Remember to monitor your account statements and your credit report for any signs of suspicious activity, and to keep your sensitive personal information as guarded as you can.
Anyone can be a victim of identity theft, anyone can use our services, and anyone can help us help others. If you found this information useful, please consider donating to the Identity Theft Resource Center to help us keep our services free to the public.