It happens every year. Honest, hardworking taxpayers spend months gathering up their paperwork and estimating their tax liability. They tax their stack of papers to their trusted tax preparer, only to receive the bad news that someone has already claimed their refund.
Tax return fraud is one of the fastest growing segments of the identity theft crime wave. Criminals gain access to legitimate Social Security numbers, then use that information to file fake returns. They then send the money to prepaid debit cards and spend the cash. The victims are none the wiser until they try to file their own returns.
Recovering from tax return fraud can be a daunting process, involving dozens of contacts and hours on the phone with the IRS. As with other kinds of fraud, the best defense against tax return scammers is prevention. Taking the following precautions is the best way to make sure you do not become a victim of this fast-growing crime.
- Keep your Social Security card in a safe place at home. You may need to carry your Social Security card if you are applying for a job, but it should be locked up at home at all other times. Keeping your Social Security card in your wallet is very risky.
- Do not divulge your Social Security number to businesses when you shop. You will need to provide your Social Security number when applying for credit, but stores should be able to use a customer number to identify you in their systems.
- Check your credit report regularly for signs of identity theft. Check the new accounts section carefully and notify the credit reporting agency if you spot any accounts you did not open.
- Keep your personal information secure in your home, and always shred personal documents before putting them in the trash.
- Never give out personal information over the phone unless you initiate the call. Never give your bank account or Social Security numbers to anyone who calls your home, even if they claim to be with your bank.
- Protect your computer, tablet, smartphone and other devices with firewalls and antivirus software. Keep your operating systems updated and patch security holes as soon as you find them.
- Always full destroy sensitive documents and unused or old hard drives
Taking these common-sense precautions can protect you from tax return fraud and other forms of identity theft. Identity thieves are not going anywhere, and their reach continues to grow. Protecting yourself from the bad guys is becoming more important every year, and there is no time to waste.