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Income Tax Identity Theft

By Jana Castanon

Be Aware Now
Identity Theft. You know what it is. You have heard ads, news reports, and warnings on ways to protect yourself. You probably have a firewall on your computer, are more cautious when you are using your credit or debit cards, and more mindful when you are giving out personal information. But, are you protecting yourself from the fastest growing area of identity theft – income tax fraud? In other words, someone could pretend to be you, file a fraudulent return, and walk away with a refund before the IRS knows that the filer wasn’t you. According to the IRS, in 2010 there were 224 investigations of fraudulent tax filings; however, by the end of January of this year, there were already 542 complaints.  In most cases, you are only made aware that you have been a victim after you have filed your taxes and are waiting for a refund. Instead, you get a notification that your taxes have already been filed, you have a balance due, or you failed to report income from an employer.

Sometimes, the best defense is a good offense. Apprisen offers these ways to help protect you from this kind of identity theft:

Guard Your Social Security Number
Protecting your social security number is the key to preventing this type of identity theft. Do not carry your social security card in your wallet or anything else that might have your social security number on it. If applying for a job and the application asks for your social security number, leave it blank. Only show it to an employer after you have been offered a job. You will also be required to give it to lenders when applying for credit. If anybody else asks for your social security number inquire what they will be using it for. If you decide the reason is legitimate, ask how that information will be stored.

Don’t Respond to Emails From the IRS
The IRS does not request information by email or social media. If you receive an email requesting personal information, such as you are being electronically audited, or that you are getting a refund, forward it to the IRS at phishing@irs.gov.

Secure Your Personal Information
Protect your personal computers by using firewalls and anti-spam/virus software. If you are e-filing your taxes when finished save the file to a CD or flash drive, and then delete the personal return information from your hard drive. Store this and all personal information in a safe place, such as a lock box or safe. Shred any statements or documents that contain personal information. If possible, contact your bank or lender to inquire if e-statements are an option.

Use Reputable Tax Professionals
Some identity thieves work together to form a company and pose as tax preparers. Never hand your information over to any person who is not a recognized tax professional. Use only preparers that have been recommended to you or from a company you are familiar with. If in doubt, contact your local BBB for information about the firm. 

Check Your Credit Report
If a thief is using your social security number to file false tax returns chances are they are also opening up fraudulent accounts. One way to see if that is happening is to check your credit report. You are entitled to one free copy of your report from each of the credit bureaus once a year through www.annualcreditreport.com. If you question any of the information on the report, you can dispute it. The process of how to do this is supplied at the end of the report. 

File Early
The IRS processes returns as they receive them. If you file early, the thieves have less of a chance of getting your refund. If you have received a letter from the IRS and you believe you are the victim of identity theft, you need to respond immediately! Notify the IRS and provide them with the name and number printed on the notice.

Jana Castanon is the Community Outreach Coordinator for Apprisen. Apprisen is a member of the National Foundation for Credit Counseling. To schedule an appointment with a certified financial counselor call 800.355.2227, or visit Apprisen’s website at www.apprisen.com.

Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.


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