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How To Protect Yourself From Tax Identity Theft

Presented By Infinitas


Cyber Security Lock

 

When it comes to filing tax returns, you want to complete every form accurately and according to the instructions. Finding out that someone filed a fraudulent return in your name is something you never want to experience. By the end of February 2020, however, tax-return identity theft was already up 751 percent year-over-year, according to a U.S. Treasury report. As of June 2020, the U.S. Treasury Inspector General for Tax Administration reported the IRS had flagged 892,777 tax returns for potential identity theft. This is a growing problem, and we want to help you keep your information and identity safe.


To file taxes fraudulently, a thief needs only your name, social security number (SSN), and date of birth. From there, they can easily falsify your W-2 information and attempt to claim a refund. You, the taxpayer, won’t find out about the fraud until it’s too late and you receive a notification from the IRS that your legitimate tax return has been rejected.


Scam Tactics

Cybercriminals can obtain your personal information in many ways: posing as IRS representatives and procuring information via phone or email, sending phishing emails, stealing your W-2 from your mailbox, or accessing information over unsecured Wi-Fi networks. Unfortunately, if you’re a victim of tax fraud, your SSN has been forever compromised. It means you’re more likely to have another identity theft issue in the future, so it’s even more imperative that your information is kept safe.


Protecting Yourself Against Tax Identity Theft

Unlike a credit card number, an SSN cannot simply be canceled and changed when it’s stolen. Protecting yourself from fraudulent use of your SSN is up to you. Here are some smart strategies: 


  • Notify the Federal Trade Commission (FTC), Social Security Administration (SSA), and IRS. The faster you take action, the less damage thieves can do. In addition to filing a complaint with the FTC and notifying the SSA, call the IRS Identity Protection Specialized Unit at 800.908.4490 to report the theft.

  • Complete and submit Form 14039. If you haven’t already done so, fill out IRS Form 14039, the Identity Theft Affidavit, to notify the IRS that your future returns may be at risk.

  • Apply for an Identity Protection PIN. Once the IRS knows you’re an identity theft victim, you should apply to the agency for this six-digit PIN, which it will require to process all future tax returns.

  • Notify one of the major credit bureaus. Report the fraud and place an alert on your credit report to one of the three major credit bureaus: Experian, TransUnion, or Equifax. When you file a report with one bureau, it’s legally required to alert the other two. With a fraud alert on your credit report, potential creditors or lenders will have to contact you directly and obtain permission before opening a new line of credit.

  • Purchase credit monitoring. With credit monitoring, you’ll be able to keep tabs on your credit report. Not only will credit monitoring services let you know about any attempts to open a new line of credit in your name, but they’ll also monitor existing accounts and alert you of any changes. Many also offer recovery assistance services, monetary and legal assistance, and insurance that covers expert consulting regarding identity theft.


Keeping Vigilant

With your SSN already in the hands of at least one identity thief, you are more than likely to face this same issue in the future. Keep a close eye on your finances to spot any criminal activity as soon as possible. Credit monitoring will help you keep tabs on your credit. In addition, file your taxes as early as possible each year to avoid another fraudulent filing.


Finally, remember that the IRS will never contact you electronically and almost never by phone. They generally communicate via letters through the U.S. Postal Service. If you receive a phone call from someone saying that they are from the IRS, hang up and call your local IRS office directly to ensure that you’re speaking with an actual representative.


If you have any questions about the information shared here, please feel free to call or email us. We will do all that we can to help you.

 


Contact an Infinitas financial advisor about social security

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