Financial Review Corliss Group online magazine: Ways to reduce your vulnerability on tax-related
10 ways to reduce your vulnerability on tax-related identity theft
Identity theft continues to be one of the major growing crimes in United States nowadays, and places a large burden on victims, businesses, non-profit organizations and government institutions, especially when filing tax returns to the Internal Revenue Service (IRS).
Tax-related identity theft happens when somebody uses your stolen Social Security number to file a tax return claiming a fraudulent refund.
Usually, an identity thief will use your SSN to file a false return early in the year. You may be unaware you are a victim until you try to file your taxes and learn one already has been filed using your SSN.
Identity theft is a top priority for the IRS. They have already taken aggressive action to protect taxpayers and aid victims, with more than thousands of employees assigned to work on identity theft related situations. They also train employees to recognize return fraud and to help victims when it happened.
Because of this, the IRS prevented $14.6 million suspicious returns, and protected more than $50 billion in fraudulent refunds from 2011 to November 2013.
You can't prevent tax-related identity theft because we are all vulnerable, but here are ways on how to reduce your chances of being a victim.
1. Safeguard all your personal information in a secured place at home and at work such as a safe with a locked combination. Don't leave it lying around.
2. If you wish to file by mail, do it at a post office, not from an unsecured mailbox in front of your house.
3. Use a secured computer on a protected network if you wish to file electronically. Remember not to do anything financial or tax-related on public Wi-Fi networks.
4. Beware of phishing scams. Phishing includes seemingly harmless emails being sent to you, asking you to verify certain things such as passwords, account numbers or credit/social security details. Any email looking for this kind of information must be an immediate red flag for you. Avoid opening emails that doesn't make sense to you or that comes from people or organizations that you don't know. It might be possible that they include viruses or worms. Remember that the IRS doesn't begin contact by email to specifically ask for your personal or financial information.
5. Protect your social security number. Don't carry your Social Security card in your wallet or purse. Only carry them with you unless you are going somewhere where it will be absolutely necessary. Don't forget that identity thieves only need a social security number and some fake documents. It is much easier than selling drugs or stealing cars.
6. Tear up or shred any documents with identifying information on them. Don't just throw your old billing statements and other documents containing important information into your garbage. There are "dumpster divers" who are willing to go through old coffee grounds and rotten orange peels to get your data into their hands. Purchase crosscut paper shredder and completely destroy any piece of paper that has your credit card number, your social security number, or your bank account number on it.
7. Regularly monitor your financial accounts for there might be unusual withdrawals or credit card purchases.
8. Check your Social Security Administration (SSA) earnings statement every year.
9. Get your return done as early as possible. It really is in your best interest to file as early as possible.
10. Protect your computer. Some identity thieves now use advanced software to get your personal information such as login details and passwords. A strong and regularly updated firewall, anti-virus program and anti-spyware program will give most of the protection you need.