Tax-Time: Beware of Identity Theft

With tax season once again upon us, protecting your identity is imperative.  Identity thieves, particularly around this time of year, begin to emerge and scope out victims.  Because of easy accessibility to personal information, identity theft now affects millions of people every year.  In a nutshell, for those who have become victims to this fraud, their personal information was stolen and used without their permission.

Tax-time brings with it identity thieves who do their best swindling, knowing particularly well how to prey on the most susceptible.   The tax season setting means that in most cases an identity thief needs only to obtain your name and social security number in order to get a hold of your IRS tax refund monies.

How the Scheme Works

A nearly surefire indication that your identity was stolen is when you file your tax return only to find out that it was rejected.  In this case, an identity thief has already filed your return fraudulently and has made off with your refund.

What happens in these scenarios is simple.  The crook has gotten a hold of your name and social security number.  He then files a return with the IRS, indicating a made-up income with deductions, and then files the paperwork fraudulently on your behalf.  The refund check then gets mailed to the address he provided.

Although the IRS does as much as it can to deter these scams, it does admit that fraudulent returns are not that easy to detect in the first place.  People’s lives change constantly and in a variety of ways and often in short time frames:  changes in jobs and career titles, marital status and dependents, home address, salaries, etc.  Moreover, given that the IRS only catches a small glimpse of your life once a year, detecting identity theft can be a tall order.

Obvious Mindfulness Can Go a Long Way

Obtaining someone’s personal information in order to file a fake tax return can be done in a number of ways.  Some are completely outside of your control such as a computer system, which has your private information in it, gets hacked or malicious phishing websites retrieve it.  Although it is nearly impossible to eliminate all probability for tax-time identity theft, there are some simple habits which you can incorporate into your life that can greatly reduce the chances for it to occur:

  • Filing securely: Before filing your tax return electronically, ensure that the computer is highly secure and includes updated and effective anti-virus software on it.   You should never use a public computer, like one in an Internet café or the public library for filing purposes.
  • Do not get sloppy with personal paperwork: Most identity thieves use the primitive method of locating your information from the trash; therefore, it is wise to invest in a shredder and faithfully take the time to properly destroy any and all personal paperwork.  In addition, never leave old tax returns lying around.  Ideally, these should be stored away in a secure place which is not accessible to people who enter your home or business.
  • Be wary about giving out personal information: Do not automatically give out your social security number to people, whether in person, over the phone, or over the Internet just because they ask for it or identify themselves as someone of authority.  This classic trick, a scammer posing as an IRS agent, calls your telephone and requests your social security number.  Instead insist on verifying who you are speaking to, and a good rule of thumb is only if you have initiated the contact should you provide the information.
  • File as early as possible: The sooner you file your tax return the shorter the time frame an identity thief has to do his work.  The longer you wait to file works in favor of the con artist, as it gives him ample time to strike and make off.

Always be on alert that the potential for identity theft is something that you are vulnerable to.  Consequences of identity theft can include lost property and damage to both your credit score as well as reputation.   If you are a victim, The Dallo Law Group can help you navigate through this difficult time and find out what options you can take.  In fact, our expert team may be able to help you even if the police cannot.  After thorough review of your circumstances, we can offer you the best course of action to take including your legal rights and available recourse.