I hear it from my husband all the time when I shred paperwork containing personal information, “You are so paranoid.” Well, we are living in a time when identity theft is so prevalent. Now, tax-related identity theft is increasing.
The Bad News
According to the Everett Herald’s How to avoid someone using your name for a tax rebate:
In 2010, the IRS was able to identify and remove almost 49,000 bad returns seeking fraudulent refunds of $247 million directly related to identity theft. Last year, it removed from processing almost 262,000 returns that sought almost $1.5 billion in fraudulent refunds connected to identity theft.
The Good News
The article goes on to say that in January, the IRS and the Justice Department announced a nationwide crackdown on identity thieves, targeting more than 100 people in 23 states who were allegedly involved in identity theft and tax refund fraud.
The IRS is taking an active approach to prevent identity theft and detect refund fraud cases. New identity theft screening filters will improve the IRS’s ability to spot false returns before they are processed. The IRS also created a new section on www.IRS.gov to help you identify theft matters, including YouTube videos, helpful tips for taxpayers and a Taxpayer Guide to Identity Theft.
How to Protect Yourself
There are any many steps you should follow to avoid a messy situation, including:
- File your tax return early. Thieves will try to file a return early using your social security number.
- Be suspicious of emails that appear to be from the IRS. These might be phishing attempts to get your personal information. Remember, the IRS does not contact you using email. Instead you will receive a letter in the mail.
- Look for warning signs if the IRS sends a letter stating that IRS records indicate you received wages from an employer you don’t know.
- Store W-2 forms in a safe location. Avoid work offices, common living areas, cars and unlocked mailboxes. Place records in a locked file cabinet or if records are online, use a secure password on your computer.
- Clear out old files
The Better Business Bureau has information on its website about protecting W-2 forms. The Federal Trade Commission also has a warning for consumers about tax-related identity theft.
If you become or suspect you're the victim of identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490.
Other Tax-Related Scams
Identity theft is not the only tax-related scam to watch out for. CNN recently shared the list: IRS: Beware of 'dirty dozen' tax scams.
Also, KING 5’s Jesse Jones encourages consumers to read the fine print during tax season:
- Blog post by AGO Intern Sophia Reza -