Tips to Lower Your Fraud Risk this Tax Season
It’s tax season! For some, preparing and filing taxes is an hour or two-long process; for others, it’s a week or more. By year-end, the majority of us know if we will owe or if we are due to receive a refund … it’s just a matter of how much … and we are happy that everything is completed once tax season is over. Things don’t typically go awry, but tax-related fraud does happen. Knowing how to lower your risk and knowing what to do if it does occur to you, will help prevent the lasting damages to your wallet and credit score.
Let’s say for this example that you will be receiving a refund. Imagine looking forward to getting that money so you can pay off those holiday bills or plan that special vacation you’ve been day-dreaming of (or perhaps both if you’re lucky). After preparing your taxes, you happily press “send.” But then WHAM! … your return is rejected by the Internal Revenue Service (IRS) because they already received one for you. How could that happen and what do you do if it does?
Tax identity theft is when someone uses a stolen Social Security number (SSN) to file a tax return. You may be wondering, “Why would someone want to do this if I will actually owe taxes?” Even if you aren’t expecting a refund, you are still at risk. Thieves can enter fake income using your SSN in order to trick the IRS into giving a refund but, instead of that money going to you, it is actually wired to the criminal’s account. Even though the IRS has made significant efforts to help stop fraud cases in their tracks in recent years, it still happens.
Is tax fraud preventable? No. Are there steps you can take to help reduce your risk? Yes.
– Time is of the essence. Prepare and file your return as quickly as possible before someone else does it for you.
– Protect your personal identifying information (PII) by: 1) shredding documents that you do not need for tax preparation; 2) keeping your SSN card in a safe deposit box; 3) taking any outgoing mail to your local post office (do not put any mail with PII in your own mailbox – even though federal mail theft is a felony, it still happens); 4) getting your mail as soon as possible after it is delivered; 5) not responding to a phone call asking for or requesting that you confirm any PII (the IRS and legitimate companies will not initiate contact with you for this information unless you have reached out to them first); 6) not opening email attachments or clicking on any links that are not familiar to you; and 7) keeping your personal devices on lockdown unless you are using them (utilize firewalls and keep your anti-virus protection software up-to-date).
– If you think your PII has already been compromised, consider putting a free fraud alert on your credit file. There are two options: 1) an initial fraud alert, which is free and will last 90 days or 2) an extended fraud alert, which can be $10 or more but can last up to seven years.
– Be aware of the latest scams. Read our blogs on the topic: New Year Scam 2020 Style and Scams, Scams and More Darn Scams
– Actively monitor your accounts. You can access your tax account history (and see if someone has already filed for you) at https://www.irs.gov/.
– Get a trustworthy tax preparer. There are people who pose as tax preparers as well as online filing services that may promise you a bigger refund and/or may make questionable deductions for you in order to increase their fee. If you are seeking professional help, make sure it is from a certified tax professional or certified public accountant.
If your tax return is rejected due to being a ‘duplicate,’ an Identity Theft Affidavit (IRS Form 14039) should be filed as soon as possible to let the IRS know that someone else is using your identity. Contact Guard Well’s Member Services at 1.888.966.GUARD (4827) immediately if needed. A team member is always available 24/7/365. You can also email us at firstname.lastname@example.org. Happy filing!