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Tips for Tax Identity Theft Awareness Week

You’ve worked tirelessly all year and been looking forward to your well-deserved tax refund, but there’s one dilemma: Someone other than you (a Tax Thief) already filed your taxes!

This was not the news you wanted or expected to hear, yet it is becoming more of a reality for many individuals during tax season. Tax thieves steal your personal information, such as your Social Security number and use it to get a tax refund or obtain a job. According to the FTC, tax-related fraud has been the most common and fastest growing category of identity theft for the past five years. During 2016, the FTC received over 3 million complaints (42% fraud, 13% identity theft and 45% other complaints) with 29.2% of identity theft cases qualifying as tax fraud.

 

Massachusetts alone reported 7,287 complaints of identity theft with 38% or 2,742 victims of tax fraud for the past year. Don’t let yourself become another statistic:

 

Know the Warning Signs

·        You’ve received a letter from the IRS stating more than one tax return was filed in your name or using your Social Security number

·        You owe additional tax or have collection actions taken against you for a year you did not file a tax return

·        Debt collectors are contacting you about debts that are not yours

·        Records show you received wages from an employer you don’t know or didn’t perform work for

·        Your health plan won’t cover you because medical records show a condition you don’t have or you’ve been billed for medical services you didn’t receive

·        You’ve stopped receiving your mail and bills

 

How Tax Thieves Get Your Personal Information

·        Dumpster Diving & Mail Theft – someone goes through someone else’s garbage or mail to obtain personal identifiable information off items typically found in trash (i.e. credit card bills, utility bills, bank statements, and medical insurance).

·        Phishing Schemes – fraudulent emails and look-alike websites posing as legitimate in order to lure individuals into providing personal or financial information, such as passwords or credit card numbers. These scams oftentimes include threats to terminate or deactivate accounts or services if immediate action is not taken.

 

Outsmart Tax Thieves

·        File your return as early as possible, before thieves have an opportunity

·        Use a secure internet connection and not public Wi-Fi (if filing electronically)

·        Get recommendations and referrals for trustworthy CPAs  

·        Shred all documents containing personally identifiable information with a cross-cut paper shredder prior to disposal or go paperless with eStatements and receive statements and bills electronically

·        Refrain from sending sensitive information via email or text message

·        Check your credit report annually at annualcreditreport.com to make sure no accounts you’re unaware of have been opened in your name

 

Recover from Identity Theft

·        If you believe you’re a victim of tax identity theft contact the IRS Identity Protection Specialized Unit at 800-908-4490

·        File a report at IdentityTheft.gov where a personal recovery plan and account will be created to walk you through each step and track your progress

·        File a police report

·        Complete the IRS Identity Theft Affidavit

·        Place a fraud alert by contacting one of the three credit bureaus and review your report for any accounts or charges you don’t recognize (the company you report to will alert the two other credit bureaus)

·        Consider placing a credit freeze to prevent fraudsters from using your information to apply for a credit card (you’ll need to call all three bureaus)

 

Additional reminders this tax season:

·        If mailing your tax return, always remember to mail from a post office instead of a home mailbox to reduce the risk of mail tampering

·        IRS Scams -The IRS initiates most contact through postal mail delivery. The IRS will not call to demand immediate payment using a specific payment method. The IRS does not initiate contact with taxpayers by text message, email or social media channel to request personal or financial information. If someone claiming to be from the IRS contacts you through one of these methods ignore it and forward it to phishing@irs.gov.

·        Confirm the authenticity of any IRS notices you receive by mail by calling the toll-free number: 800-829-1040

 

The FTC is hosting a series of free webinars and Twitter chats to help consumers and businesses prepare for the tax season and reduce their chance of becoming a victim of tax fraud. Visit ftc.gov to learn more.

 

Sources: FTC, FTC Consumer Sentinel Data Book-2016, IRS