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Money Matters

How to Prevent Tax Identity Fraud

Identity theft is a hot button topic when tax season rolls around — for good reason! This time of year personal and financial data is circulating through the mail, over the internet and in person. This can put you at risk, so being extra protective of your information is a great way to safeguard your identity. Follow these steps to ensure you’re protecting your identity during tax season.

Table of Contents:

9 Tips to Help Prevent Tax Identity Theft

How to Prevent Tax Identity Theft When E-Filing Taxes

Beware of IRS Tax Fraud Scams

Think You’ve Been a Victim of Identity Theft During Tax Time?

9 Tips to Help Prevent Tax Identity Theft

To ensure you’re protecting your identity during tax season, consider the following tips.

Keep your address up-to-date

Make sure that you have the correct address on tax-related forms with your employers and financial institutions. Remember to include any investments or loans you have with companies outside of your banks and credit unions — they’ll be sending you tax forms, too.

E-file your taxes

If you don’t like the idea of having your tax forms mailed to you, check to see if there is a secure online option. Many banks, financial institutions and employers offer this option.

Keep track of your tax documents

You should have a good idea of who will be sending you documents. Stay on top of your tax paperwork with a checklist so you know if anything is missing.

Watch the date

The Internal Revenue Service (IRS) requires all W-2s, 1098s and 1099s be postmarked by Jan. 31. This means you should receive them by mid-February, giving the post office time to deliver. If you haven’t received them by then, check to make sure they were mailed.

Watch your credit report

If you didn’t get one of your tax documents and you’ve confirmed that it was mailed, or you got one that looks like it’s been opened already, there’s no reason for alarm. But you should be diligent and keep an eye on your credit reports for unauthorized accounts and charges.

Use care at home

Once you get your tax documents, store them in a safe place until you’re ready to file your taxes. When you get your tax returns, use the same level of care to protect those documents.

Use certified mail if mailing taxes

If you’re mailing your taxes, send them by certified mail for added security.

Pick a trusted tax preparer

If you’re not going to do your taxes yourself, then picking a tax preparer you trust is pretty important. Make sure to ask how they will store your private information.

Act quickly on rejected returns

If the IRS rejects your tax returns because one has already been filed in your name or under your social security number, it’s time to act quickly. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

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How to Prevent Tax Identity Theft When E-Filing Taxes

If you think filing your taxes electronically is safer, you could be right. E-filing is fast, convenient and your information is protected — that is if you keep your computer protected. The best way to protect your identity during tax time when e-filing your taxes is to be diligent about your computer security all the time. Use these tips to maintain security when filing taxes online.

Stay up-to-date

Keep your operating system and computer protection current. It’s a great idea to check them all for updates before you file your taxes online, just to be sure you’re using the most modern versions.

Use strong passwords

It’s tempting to use an easy password, but it’s not the safest bet. Learn how to create a strong password and then be diligent about updating it. Try mixing upper and lower case letters with numbers and special characters to create a good password. And remember, a longer password is harder for someone else to guess.

Secure your smart phone

If you’re going to use your smart phone, make sure your phone and all its apps are password protected. Did you know that there is software that lets you remotely wipe all information from your phone if it’s lost or stolen?

Erase it before discarding it

If you decide to get a new computer and want to donate or even throw out your current one, make sure all of your personal data is completely erased.

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Beware of IRS Tax Fraud Scams

One of the most important things to know is that the IRS will never initiate contact with you through unsolicited emails, text messages or any social media. If you receive a message from any of these outlets and didn’t first contact the IRS yourself, then it’s a scam and someone is probably trying to commit ID theft.

Many people believe that the IRS will never call you, and this is partially true. They will never initiate contact through a phone call, but they might follow up on your returns or a query you sent them with a phone call.

5 Things to Pay Attention to Know If a Call is an IRS Scam

The IRS warns that telephone scams are everywhere and reminds you to be on high alert for them. They suggest you pay close attention if a caller claims to be from the IRS, so watch out for the following five things.

Payment demands

Be alert for immediate payment demands or referencing taxes owed without first having mailed you a bill.

No options

Watch out for anyone who asks for payment without giving you a chance to question the amount or appeal.

Payment methods

The IRS gives you several payment options, so if someone requires you use a specific payment method, such as a prepaid debit card, they’re not legit.

Private information

If someone claims to be from the IRS asks for credit or debit card numbers over the phone you should not give this information out.

Legal threats

Don’t trust anyone who threatens to have you arrested for not paying taxes.

The IRS would never do these things, so if someone does hang up immediately. If you know the call was a scam, you can report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484. Or you can file a complaint using the FTC Complaint Assistant.

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Think You’ve Been a Victim of Identity Theft During Tax Time?

Your first defense is being proactive and taking all the steps you can to protect yourself from tax identity theft; however, tax identity does happen, and there are next steps if you’ve been a victim. One of those steps is connecting with Your American Family Insurance agent to learn more about identity theft protection. With your homeowners policy you can add on coverage that can help you protect your good name and hard-earned credit.

This article is for informational purposes only and is available through different sources. This information does not, and is not intended to, constitute legal advice. You should contact your attorney for legal advice specific to your situation.


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Related Topics: Identity Theft , Finance