Blog / Post

Beware the Tax Identity Thief

Jan 15, 2014

By way of courtesy of the Louisiana
Better Business Bureau:

This time of year, when the last of the tinsel has been put away, my least favorite season of the year begins. I am, with apologies to all tax accountants out there, referring to tax season.

Unfortunately, tax season is no longer the only time you need to be concerned about your tax identification number, also known as your Social Security number. Identity thieves use these numbers to secure jobs, get a tax refunds or - gasp! - use your child as one of their dependents.

Because tax identity theft is now the most prevalent form of ID theft, the Federal Trade Commission has named Jan. 13-17 as National Tax Identity Week.

At the Better Business Bureau, we've seen first-hand how tax identity theft can wreck havoc on people's lives. For example, a local teen went to file her first tax return and found out six people in the Denver area had been using her Social Security number, presumably to avoid paying back taxes. More common are the phony emails stating you're due a tax refund and all you need do is provide your Social Security and bank account numbers.

Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or IRS records show they received wages from an employer they don't know. If you get a letter like this, don't panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

How do tax identity thieves get your information?
• Someone goes through your trash or steals mail from your home or car.
• Impostors send phony emails that look like they're from the IRS and ask for personal information.
• Dishonest employees from businesses that have access to your personal and financial information.
• Phony or dishonest tax preparers misuse their clients' information or pass it along to identity thieves.

To lessen the chance you'll be a victim, both your BBB and FTC advise:
• File your tax return early in the tax season before identity thieves do.
• Use a secure Internet connection if you file electronically, or mail your tax return directly from the post office. Don't use unsecure, publicly available Wi-Fi hotspots at places like coffee shops or a hotel lobby. Shred copies of your tax return, drafts or calculation sheets you no longer need.
• Respond to all mail from the IRS as soon as possible.
• Know the IRS won't contact you by email, text or social media. If the IRS needs information, it will contact you by mail.
• Don't give out your Social Security number or Medicare number unless necessary. Ask why it's needed, how it's going to be used and how it will be stored.
• Get recommendations and research a tax preparer thoroughly before you hand over personal information.
• Check your credit report at least once a year for free to make sure no other accounts have been opened in your name.

More information about tax identity theft is available from the FTC and the IRS

Category: Bookkeeping