Tax Season and Identity Theft
The IRS and the tax industry united in 2015 to identify safeguards to protect your federal and state tax accounts from identity thieves. Many of these steps are invisible to you but will help to verify the identity of the taxpayer and the validity of a tax return. There are new password standards for tax software and the IRS is doing a better job of sharing information about identity theft schemes.
In recent years, the IRS has helped convict nearly 2,000 identity thieves thanks to the IRS Criminal Investigation Division and they have 1,700 open investigations. All this means is the IRS and tax industry have formed a strong partnership in the face of a constantly evolving enemy – the identity thief.
For the 2016 filing season, there will be new standards for logging into all tax software products such as minimum password requirements, new security questions and standard lockout features. The software industry will provide more than 20 additional data elements from the tax return submission to the IRS to help identify fraudulent returns.
Here are some basic, common sense steps if you are a regular internet user:
Use security software to protect computers. This includes a firewall and anti-virus protection. If tax returns or sensitive data are stored on the computers, encrypt the files. Use strong passwords.
Beware of phishing emails and phone scams. A common way for identity thieves to steal names and Social Security numbers, passwords, credit card numbers, bank account information is to simply ask for it. Clever criminals pose as trusted organizations that you recognize and send spam emails, calls or texts. Their email may ask you to update a bank account or tax software account and provide a link to a fake website designed solely to steal your logon information. They may call posing as the IRS threatening you with jail or lawsuits unless you make an immediate payment. They may provide an attachment which, if you download, will infect your machine and enable the thief to access sensitive files or track your key strokes.
Protect personal information. Do not routinely carry your Social Security number. Properly dispose of old tax returns and other sensitive documents by shredding before trashing. Check your credit reports and Social Security Administration accounts at least annually to ensure no one is using your good credit or using your SSN for employment. Oversharing on social media also gives identity thieves even more personal details.