February 01, 2018 · Security, Taxes

Protect Your Tax Returns From Identity Theft

There are a number of tips to keep in mind as you file your state and federal taxes. These suggestions are meant to protect your data before you file, when you file and if your information has been compromised in the past.

Tax Time Scams – If you receive an email asking for your Social Security number or financial information, delete it or send it to the Federal Trade Commission for investigation. The IRS does not send emails stating you are being electronically audited or that you are getting a refund. If you have any questions about an email you received from the IRS, or a letter that sounds suspicious, call the IRS Taxpayer Advocates at 877-777-4778.

IRS ID Theft Notification – The IRS may send a notice indicating that more than one person is using your Social Security number, or that you owe taxes. If this happens, contact the IRS Taxpayer Advocates at 877-777-4778.

Paper Security – Make sure you safely keep all tax documents and paperwork in a locked location. Any financial statement or item containing personally identifiable information (PII) should not be left unsecured or visible to others.

Computer Security – If your computer is linked to the Internet, be sure to regularly update firewall, anti-virus and anti-spyware software to protect your devices from attack. Since many taxpayers file online or store financial information on their computers, it is vitally important to install and update these security programs. This computer should never be used by children or others who might install peer-to-peer software or expose the computer to unrestricted web browsing. These activities often result in security problems.

E-Filing – While preparing your tax return for filing, use a strong password to protect the file. Once your return has been e-filed, copy the file to an encrypted flash drive and remove the personal information from any hard drive. Store the flash drive in a lock box or safe.

Filing Early – Complete your tax returns as soon as you can. Not only will you sleep a little better knowing it is finished, but you stand a better chance of beating a thief to your refund. Tax fraud has increased in the past few years because of the abundance of stolen identities available for sale online.

Licensed Tax Professional – Whether you use a walk-in tax preparer or have an accountant, ask questions about your data’s protection, security and encryption when it is being transferred from you to the preparer. A tax professional will generally provide a secure software application to communicate and transfer documents for tax preparation. Use a complex password to protect your account. Tax professionals will also file your taxes so your refund is deposited direct into your Credit Union account, not their bank account or your friend’s account.

Be selective about who works on your taxes. Trust your first impressions. If you feel uncomfortable, or doubt the firm’s commitment to protecting your privacy, take your business elsewhere.

This searchable directory is intended to help you identify a listing of preparers in your area who currently hold professional credentials recognized by the IRS or who hold an Annual Filing Season Program Record of Completion.

Mail Theft Awareness – If you prefer paper-and-pen forms that you’ll send through the mail, take it to the counter of your local post office. Avoid placing your tax return in your mailbox or drop-off locations.

State Refunds Under Attack Too – If you’ve been a victim of identity theft or federal tax return fraud, don’t overlook the potential for state return fraud. We tend to think of the IRS refund as the major payout and it usually is, but fraud at the state level can also occur. Get your state return filed as soon as you can, and be on the lookout for IRS notifications stating a problem with a “bogus” return from a state you’ve never lived or worked in.

Document ID Case – Keep documentation for all ID Theft cases by submitting a police report or the IRS ID Theft Affidavit (Form 14039).

IRS Protective Measures – The IRS uses approximately 200 identify theft filters to identify potentially fraudulent tax returns and prevent the issuance of fraudulent refunds. These filters incorporate criteria based on characteristics of confirmed identify theft tax returns, including amounts claimed for income and withholding, filing requirements, prisoner status, taxpayer age, and filing history. Tax returns identified by these filters are held until the IRS can verify the taxpayer’s identity. If the individual’s identity cannot be confirmed, the IRS removes the tax return from processing.