Tips to Prevent Tax ID Fraud

Monday, January 25 at 09:20 AM
Category: Personal Finance

As Americans begin the process of filing tax returns, identity thieves are scheming to get their hands on that money. Tax identity theft has been the most common form of identity theft reported to the Federal Trade Commission for the past five years. In recognition of Tax Identity Theft Awareness Week, Jan. 25-29, the American Bankers Association is raising consumer awareness and providing tips to prevent tax ID fraud. 

Tax identity fraud takes place when a criminal files a false tax return using a stolen Social Security number in order to fraudulently claim the refund. Identity thieves generally file false claims early in the year and victims are unaware until they file a return and learn one has already been filed in their name. 

Check out these tips to help consumers prevent tax ID fraud:
  • File early. File your tax return as soon as you’re able giving criminals less time to use your information to file a false return.
  • File on a protected Wi-Fi network. If you’re using an online service to file your return, be sure you’re connected to a password-protected personal network. Avoid using public networks like a Wi-Fi hotspot at a coffee shop. 
  • Use a secure mailbox. If you’re filing by mail, drop your tax return at the post office instead of your mailbox at home. Some criminals are breaking into standalone U.S. Postal Service mailboxes to obtain privacy information. It just takes a few minutes to drop your mail inside the post office or use their drive up drops on the side of the wall of the post office. Some criminals look for completed tax return forms in home mailboxes during tax season. 
  • Find a tax preparer you trust. If you’re planning to hire someone to do your taxes, get recommendations and research a tax preparer thoroughly before handing over all of your financial information. Shred what you don’t need. Once you’ve completed your tax return, shred the sensitive documents you no longer need and safely file away the ones you do. Contact your tax preparer or the IRS to find out what documents you will no longer need.  
  • Beware of phishing scams by email, text or phone. Scammers may try to solicit sensitive information by impersonating the IRS. Know the IRS will not contact you by email, text or social media. If the IRS needs information, they will contact you by mail first. 
  • Keep an eye out for missing mail. Fraudsters look for W-2s, tax refunds or other mail containing your financial information. If you don’t receive your W-2s, and your employer indicates they’ve been mailed, or it looks like it has been previously opened upon delivery, contact the IRS immediately.
If you believe you’re a victim of tax identity theft or if the IRS denies your tax return because one has previously been filed under your name, alert the IRS Identity Protection Specialized Unit at (800) 908-4490. In addition, you should: 
  • Respond immediately to any IRS notice.
  • Complete IRS Form 14039, Identity Theft Affidavit, if you believe your identity has been stolen or compromised.
  • Contact your bank immediately, and close any accounts opened without your permission or accounts that have been compromised.
  • Contact the three major credit bureaus to place a ‘fraud alert’ on your credit records:
Equifax* (800) 525-6285
Experian* (888) 397-3742
TransUnion* (800) 680-7289
  • Continue to pay your taxes and file your tax return, even if you must do so by paper.
More information about tax identity theft is available from the FTC* and the IRS*. 
Information courtesy of American Bankers Association.

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.

Tags: Financial Education, Privacy and Security
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