How to prevent tax ID theft

in Security

Of all of the complaints made to the FTC in 2014, nearly 33 percent of them were in regards to tax identity theft. The tax refund losses are estimated to reach $21 billion by 2016, according to the Treasury Inspector General Tax Administrations.

How tax ID theft occurs:

The most common is that the scammer will contact a consumer by phone, claiming to be an IRS agent who is calling to collect on money owed to the agency. The scammer will attempt to get the consumer to wire or load money onto a prepaid debit card. They’ll threaten arrest or legal action if the debt is not paid. Another scam involves fake emails or websites that try to gain valuable personal information from the consumer.

So how can we do our best to prevent from being part of a tax identity scam? As always, the more information we have, the more protected and prepared we will be.

The IRS will never call or e-mail about unpaid taxes or penalties

They do not send unsolicited, tax-account related emails to taxpayers and never asks for personal and financial information, including PINs and passwords, via email. The IRS advises taxpayers should be cautious about any e-mails that claim to come from the IRS.” They will also never contact you via text message or social media. They’ll always contact with a written statement that asks the consumer to agree or disagree with their assessment and respond accordingly.

People file their taxes before their employers file their data, so the IRS is giving out tax returns on blind faith that everything you have told them is correct. The deadline for employers to file their W-2 wage data is March 2 and not until March 31 for those businesses that e-file. One of the best ways to help avoid tax fraud is actually a very unpopular solution. Wait until March/April to file your taxes to ensure that your employer has filed.

We must do all we can to keep our personal information protected. This means shredding any documents that include bank account numbers, social security information, or other information that could be detrimental if found by someone else. You can also apply for an Identity Protection Pin (or IP Pin) from the IRS to help safeguard yourself. Changing passwords often can also help keep potential scammers away.

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