Tips to Thwart Tax Thieves

Cybersecurity, Financial Planning, Yeske Buie MillennialPosted on February 26th, 2016No Comments

Written By: Cristin Etheredge, FPQPTM

Tax ReturnProtecting your identity and your taxes can feel like an uphill battle. Each year around this time, we like to share reminders of best practices to keep your identity safe as awareness is a key component to protecting your identity. Typically, tax season brings about a surge of attempts for scammers and identity thieves to phish for your personal information. As such, the IRS publishes an annual list of “Dirty Dozen” tax scams that the agency has seen and anticipates to see that include email phishing, phone calls, and unscrupulous tax preparers.

Below you will find some practical and simple tips to help you in protecting your taxes and overall identity.

IRS Tips to Protect Yourself from Tax Fraud

Here are simple tips directly from the IRS website that can help you to protect your data from tax thieves:

  • Keep a Secure Computer
    • Use security software that updates automatically. Essential tools for keeping a secure computer include a firewall, virus and malware protection, and file encryption for sensitive data.
    • Treat personal information like cash; don’t leave it lying around.
    • Give personal information only over encrypted websites – look for “https” addresses.
    • Use strong passwords and protect them.
  • Avoid Phishing and Malware
    • Don’t respond to phishing emails, texts or calls that appear to be from the IRS, tax companies and other well-known businesses. Instead, verify contact information about a company or agency by going directly to their website.
    • Be cautious of email attachments. Think twice before opening them.
    • Download and install software only from known and trusted websites.
    • Use a pop-up blocker.
  • Protect Personal Information
    • Don’t routinely carry a Social Security card or other documents showing a Social Security number.
    • Do not overshare personal information on social media. This includes information about past addresses, a new car, a new home and children.
    • Keep old tax returns and tax records under lock and key.
    • Safeguard electronic files by encrypting them.
    • Shred tax documents before trashing.

Additional Ways to Protect Yourself

  • The IRS will never call your home without mailing you a notice first, call to demand immediate payment, or require you to use a specific payment method (such as an electronic check). If you receive a call that involves any of these tactics, hang up and report the call to the Treasury Inspector General for Tax Administration.
  • Be suspicious of any mail purporting to be from the IRS that demands immediate payment by calling a certain phone number and giving bank account or credit card information. If there’s a legitimate issue with your taxes, the IRS will always give you the opportunity to dispute the claim.
  • If you are ever unsure if a printed notice that you receive is actually from the IRS, you can call the agency’s toll-free number to confirm: 800-829-1040.
  • Never trust an email or text that claims to be from the IRS as the agency does not contact taxpayers through either of these communication methods.
  • Remember that scammers rely on scare tactics to get information. If you receive emails claiming to be the IRS informing you that there are rejected tax forms or impending checking account deductions, ignore the email.
  • The official address of the IRS website is irs.gov. Use caution if the domain displayed in the email or website claims to be IRS related but ends in .com, .net, .org, or other domain suffix.
  • The IRS does not offer web-based products to the general public, only for tax preparers. If you encounter an ad for IRS products that allow you to file your personal taxes, avoid it.

In addition to occurrences relating to your federal taxes, tax fraud can also affect your state filings, and states have also increased their protection of residents by increasing security. We’ve included references for both California and Virginia in this post, but please contact us if you would like the information for any other states tax fraud features.

Recovering from any type of identity theft can be a long and frustrating process. If you haven’t considered an identity protection service, we feel that the investment can help with potential future stress. Identity protection services cannot stop identity theft from happening, but they can help you identify the theft quicker and assist you in restoring your identity. While it is unfortunate that identity theft is common, the increase in theft also means that more companies have processes in place to handle the situation as quickly as possible.

For more information about overall identity protection, please see the Federal Trade Commission’s one-stop resource for identity theft victims which provides a step-by-step guide to help users through reporting identity theft and creating an action plan for resolution.

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“Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness that most frightens us. We ask ourselves, Who am I to be brilliant, gorgeous, talented, fabulous? Actually, who are you not to be? Your playing small does not serve the world. There is nothing enlightened about shrinking so that others won't feel insecure around you. We are all meant to shine. And as we let our own light shine, we unconsciously give others permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.” ~Marianne Williamson