Taxes and Identity Theft – More You Should Know
Two weeks ago, I warned about being aware of cyber crooks posing as the IRS. The response made me realize the concern is greater than even I anticipated.
Additionally, just as that article went to press, the IRS and Justice Department issued an announcement regarding a massive 23-state crack down on suspected identity-thief perpetrators that resulted in 939 charges in 69 indictments.
So while it's still fresh on many people's minds, I dug a little deeper to find additional information and resources on the matter that might be useful.
Identity theft usually starts outside of the tax system when personal information is stolen or lost. Thieves may then use that information to fraudulently file a tax return and claim a refund.
In other cases, the thief may use the ill-gotten information to get a job. You may be unaware that this has happened until you file a tax return later, and discover that two returns have been filed using the same Social Security number.
Here is a list of 12 things to know about identity theft and your taxes so you can avoid becoming a victim:
1. As said last time, the IRS does NOT use email to request information. Further, the IRS does not send emails stating you are being electronically audited or getting a refund.
If you get such an email, it's bogus!
2. If you receive a scam e-mail claiming to be from the IRS, forward it to the IRS at phishing@irs.gov. This may help others from falling victim.
3. If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov,' forward that link to the IRS at phishing@irs.gov for the same reason.
4. Identity thieves get your personal information in many different ways, including:
* Stealing your wallet or purse.
* Posing as someone who needs information about you through a phone call or e-mail.
* Looking through your trash for personal information (a personal shredder can prevent this).
* Accessing information you provide to an unsecured internet site.
5. To learn how to identify a secure website, visit the Federal Trade Commission at www.onguardonline.gov/tools/recognize-secure-site-using-ssl.aspx.
6. If your Social Security number is stolen, someone may try to use it to get a job. That person's employer may report income earned by them to the IRS using your number, making it appear you did not report all of your income on your return.
If this occurs, contact the IRS to show that the income is not yours. Your record will be updated to reflect only your information.
You will be asked to submit documentation to authenticate yourself. That information will be used to minimize this from happening again.
7. Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don't know.
If you receive such a letter, respond immediately as directed by the notice.
8. If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity.
You should submit a copy of valid identification, such as a Social Security card, driver's license, or passport, along with a copy of a police report and/or a completed IRS Form 14039, Identity Theft Affidavit, which should be faxed to the IRS at 978-684-4542.
As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490. You should also follow FTC guidance for reporting identity theft at www.ftc.gov/idtheft.
9. Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. However, do not routinely carry your card or other documents that display your number.
10. IRS impersonation schemes flourish during tax season and can take the form of e-mail, phone websites, even tweets. Scammers may also use a phone or fax to reach their victims.
If you receive a letter or notice via mail claiming to be the IRS but you suspect it is a scam, contact the IRS at http://www.irs.gov/contact/index.html to see if it is a legitimate IRS notice or letter. If it is a legitimate, reply if needed.
If the caller or party that sent the letter is not legitimate, contact the Treasury Inspector General for Tax Administration at 1-800-366-4484. You may also fax it, plus any related or supporting information, to TIGTA at 1-202-927-7018.
11. While preparing your return for electronic filing, make sure to use a strong password to protect the data file. Once your return is e-filed, burn the file to a CD or flash drive and remove the personal information from your hard drive. Store the CD or flash drive in a safe place, such as a lock box or safe.
12. If you have information about the identity thief that impacted your personal information negatively, you can file an online complaint with the Internet Crime Complaint Center (IC3) at http://www.ic3.gov.
The IC3 has an easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. IC3 sends every complaint to law enforcement or regulatory agencies that have jurisdiction over the matter.
