Woodbridge Investments

What You Need To Know About Tax Refund Identity Fraud

If you have been putting off filing your tax return, you might want to take care of it now — before a thief does it for you.

An ever-growing number of criminals are using illegally obtained taxpayer ID information to file fraudulent returns, so much so that tax refund fraud is now the most common form of identity theft. A recent report by the Treasury Inspector General for Tax Administration (TIGTA) indicates that the IRS is paying billions of dollars to tax identity thieves.

Protecting Yourself

The IRS will work with you if you do become a victim of tax ID fraud, but admits the process is complex and frustrating. You can help to protect yourself from this crime with the following tips:

1) Safeguard your Social Security number (SSN). Don’t carry it in your wallet; store it in a locked drawer at home.

2) Shred financial documents before you dispose of them. If you don’t have a shredding machine, you may want to tear the documents up and then put them into the trash on separate days to reduce the chance of a particularly patient thief piecing the documents together.

3) Caller ID information can be faked, so can email addresses and website links. Make it a rule not to provide personal information such as SSNs, account passwords or payment card PINs unless you initiated the contact with the business, institution or government agency. Contact customer service directly if you do receive a call, email or text requesting personal info.

4) Fraudsters typically try to create a sense of urgency. Any unsolicited communication that insists you act now to prevent a problem or secure a great deal should be treated with great caution.

5) Carefully check your bank and credit card statements monthly (at a minimum, these days checking weekly isn’t a bad idea) and report even the smallest unknown transaction. Criminals sometimes change a trivial amount to see if an account is working, and to gauge whether the account owner is paying attention. Check your credit reports yearly, or more often if you know or suspect that your personal information has been exposed due to theft or loss.

Getting Help

If you are concerned you may be a victim of tax ID fraud, contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Mon. – Fri., 7 a.m. – 7 p.m. local time; Alaska & Hawaii follow Pacific Time).