As tax season is upon us, the Identity Theft Resource Center (ITRC) wants to help arm consumers with the tools to prevent Tax Identity Theft, the second highest case the ITRC manages, especially during this time of year.
The ITRC is not alone in this battle. In a report released by the inspector general, in 2012 the Internal Revenue Service paid out $4 billion in fraudulent returns due to identity theft. Individuals and businesses alike are susceptible to identity theft and duping the IRS.
In the 2011 tax year, 277,624 stolen Employee Identification Numbers (EINs) were used to report false income and withholding on nearly a million tax returns causing the IRS to pay more than $2.2 billion in fraudulent returns. In five years, this type of tax fraud could cost the IRS $11.4 billion. The ITRC believes the United States government stands at the helm of what can be considered a serious threat to our country.
The U.S. government is fully aware of the dangers and vast costs associated with tax identity theft. In an attempt to rectify the issues, the government will need to place taxpayers security above convenience. Filing from a mobile device in an effort to receive a return quickly is worth naught, if your identity is vulnerable.
Recently, the IRS rolled out a robust system to assist in flagging fraudulent, electronically processed tax returns. While the system has helped to catch many fraudulent returns, it is still in its infancy and currently slows the returns of other legitimate filings. The Federal Trade Commission (FTC) also sees the risks associated with counterfeit returns and is hosting its annual Tax Identity Theft Awareness Week this week.
The ITRC has partnered with the FTC for a Twitter chat to bring tax identity theft awareness to the forefront on Thursday, January 16th. As with the ITRC, the FTC, aims to teach consumers how to protect themselves from tax identity theft. Join the Twitter chat and prepare yourself before you file your return. The IRS begins processing returns on January 31st.
Here are three easy tips on how to minimize your risk of becoming a victim of tax identity theft:
– Protect Your Social Security Number: Your SSN is the key to your identity and with it criminals can file fraudulent tax returns (and perpetrate a host of other fraudulent activity).
– Shred old documents: When you no longer are required to store a past tax document, shred it and all of the paperwork related to it.
– Beware of phishing scams: The IRS will never ask you for your SSN or any account information through an email. If you receive an email claiming to be from the IRS and they are asking for this information, forward it to email@example.com and then delete it from your inbox.
Good Luck, and Happy Filing!