As tax season begins, the risk of identity theft rises. The Federal Trade Commission (FTC) wants to educate consumers during Tax Identity Theft Awareness Week, about the dangers they may face when filing taxes.
Tax fraud is on the rise, and the IRS has not been able to detect all of the cases before returns are paid out. The variety of scams has grown as fraudsters invent new ways of acquiring the necessary information to receive someone else’s tax return. In 2014, the IRS released a list of the ‘12 Dirty Dozen Tax Scams’ as a way of informing the public of how they might be at risk; however, billions of dollars in fraudulent tax returns are still being issued.
· How do they do it?
o They use your Social Security Number.
§ Your Social Security Number can be used to file a fraudulent return before you are able to file your taxes this year. When you submit your tax returns, the IRS will send a letter claiming you already filed a tax return.
§ If a person uses your Social Security Number to acquire a job, the IRS records will show those earnings. The IRS will believe that you failed to report additional earnings even though you have no knowledge of the position.
· How do I prevent it?
o Take extra steps to protect your information.
§ Never give out sensitive information to an unverified source. You will never receive an email, text, or social media message from the IRS. If you receive a message claiming to be the IRS through these platforms, report it to phishing@irs.gov. DO NOT OPEN THE MESSAGE.
§ Shred all sensitive documents.
§ Stay informed of current events and circulating scams in your area.
§ Do not give sensitive information over the phone unless you initiated the phone call. If you are unsure at all, hang up and call the IRS to verify.
· What do I do if this happens to me?
o Contact the IRS directly.
§ IRS Identity Protection Specialized Unit
1-800-908-4490
§ Keep records of all communications regarding your case and your efforts to resolve the issue.
o Additional Steps
§ Put a fraud alert on your credit reports and obtain a copy of your current credit report.
§ File a report with the FTC and police.
For additional information, visit www.consumer.ftc.gov or our Quick Tips: Identity Theft Protection page for further resources, .
Information gathered from bauerfinancial.com and consumer.ftc.gov.