Should you be concerned about taxpayer identity theft? Here’s a hint. Tax Identity Theft Awareness Week starts February 3, 2020. As a general rule, anything worthy of having its own dedicated Awareness Week deserves your full attention.
Tax-related identity theft occurs when someone uses stolen personal information to file a tax return claiming a fraudulent refund. The problem has become so serious that the Internal Revenue Service has issued numerous publications about safeguarding taxpayer data and preventing identity theft. According to the IRS, you should be alert to possible tax-related identity theft if:
- you get a letter from the IRS inquiring about a suspicious tax return that you did not file;
- you can’t e-file your tax return because of a duplicate Social Security number;
- you get a tax transcript in the mail that you did not request;
- you get an IRS notice that an online account has been created in your name or that your existing account has been accessed or disabled when you took no action;
- you get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return; or
- IRS records indicate you received wages or other income from an employer you didn’t work for.
To protect against taxpayer identity theft, the IRS recommends that taxpayers:
- Use current security software (firewalls, virus/malware protection, file encryption). Make sure it updates automatically.
- Treat personal information like cash. Don’t leave it lying around.
- Use strong, unique passwords and 2-Factor Authentication.
- Avoid phishing scams and malware that often come in emails that appear to come from a trusted source and emails with urgent messages.
Finally, the IRS wants everyone to know that they will never:
- initiate contact by email, text or social media to request personal or financial information;
- call taxpayers with threats of lawsuits or arrests; or
- call, email or text to request taxpayers’ Identity Protection PINs.
When preventative measures fail, insurance is available to help victims through the often expensive and time-consuming process of recovery. Please contact us if you would like more information about insurance specifically designed to protect against identity theft.