Did you know that, according to the Federal Trade Commission (FTC), 34 percent of identity (ID) theft fraud is employment or tax-related, or that 29.4 percent is tax fraud?
According to the FTC in 2016, there were over 3,050,000 fraud and ID theft complaints filed. Further, 1,093 data breaches and records were exposed that same year, per the ID Theft Resource Center.
Clearly, tax-related ID theft is a national crisis, and one for which you may not even know you are at risk until it is too late! Tax-related ID theft occurs when someone else uses your stolen Social Security number to file a tax return, claiming fraudulent refunds.
The good news is you are not powerless. Here are some steps you can take to protect yourself and your family.
Monitor your personal information. Be sure to regularly check your bank and credit card statements for unrecognized activity. Also, take advantage of the ability to order your free annual credit report.
Beware of impersonators. NEVER provide personal information to callers (or emailers) you do not know.
Be careful what you post. It is a bad idea to post personal or family data on social media. And as we caution our kiddos - Stranger Danger! Only accept friend requests from people you know.
Protect your private personal info. If you don’t have one (or have access to one), invest in a shredder and shred any documents that have personal information before throwing them away. Be very selective when sharing your Social Security number.
Keep your computer secure. Use current versions of antivirus, malware protection, and firewalls and keep them updated. Use strong passwords and change them frequently. Never should you share them.
Avoid phishing scams. Do not open email attachments or click on links unless you know the sender. Also, we have said it before and will keep saying it; the IRS never initiates contact by email, text message or through social media.
Take cybersecurity seriously. No sensitive tax or personal information should be sent via unsecured email. Always use a secure portal, an encrypted email service, or send sensitive information through the post office. Simply assigning a password to an email attachment does not adequately secure the document from would be thieves.
So, despite the above, let’s say you become a victim of ID theft; what now? Here are some suggestions:
1) Report the theft to the FTC at IdentityTheft.gov, local law enforcement and your state’s attorney general;
2) Contact the major credit bureaus to place a fraud alert on your records;
3) Close any accounts you did not open or that may have been compromised;
4) Respond to all IRS notices and continue to pay your taxes and file tax returns.
The unfortunate reality is that personal data is already at risk everywhere. While nothing is fool-proof when it comes to ID thieves (they may be crooked, but they are also typically really smart), taking the above precautions can go a long way to preventing you from being a victim of tax-related (and other) ID theft and fraud.
Lane Keeter, CPA is Office Managing Partner of the Heber Springs Office of EGP, PLLC, CPAs & Consultants