Did you know that in the 2016 tax filing season, fraudsters filed almost 60,000 fake online and 2,500 paper tax returns? Those numbers are increasing as hackers get access to sensitive data from breaches like Equifax. If your personal data was compromised in a cybersecurity breach, you need to be extra vigilant … but even if you haven’t been a victim of identity theft, you still may need to protect yourself during tax season.
While tax season is over, something to keep in mind for next year is to file as early as possible. The IRS usually opens filing season at the end of January, and while some financial information isn’t released until February, it’s always a good idea to avoid procrastinating. Hackers thrive on late filers and use that opportunity to file a false return in your name and claim the refund, which becomes problematic when you file your real return.
CPA Pro Tip:
You can also request a P-TIN, or Personal Tax Identification Number, from the IRS. Once the IRS issues your P-TIN, your tax return cannot be filed without it, which helps safeguard against scammers.
Some scams are easy to recognize, like offers too good to be true or clearly doctored logos. However, fraudsters are becoming more sophisticated and like to play on peoples’ weaknesses, like fear. The IRS will never call or email you to collect on a balance, for example; they will always communicate first via mail. And the IRS will never threaten you with jailtime if you fail to pay an entire balance up front, nor will they ask for payment information over the phone.
Be wary of any email or phone call that requests personally identifiable information, like social security number, bank account, or credit card numbers. If you receive a phone call you suspect is fraudulent, request a reference or case number, then hang up. Call the IRS directly with the case number to see if it’s valid.
CPA Pro Tip:
You can report phishing scams to the IRS directly using this link, or call your CPA at Naden/Lean for guidance.
Protect Your Cyber Identity
Protecting yourself online means being smart with your passwords, not sharing log-in information, and making sure the websites you visit are secure and verified.
Strong passwords are longer, with symbols and lower- and uppercase letters. Avoid using passwords that are easy to guess, like the name of your pet. It’s also smart to have different passwords and avoid using the same one for multiple sites.
Monitor Your Credit and Bank Accounts
Because banking can be done almost entirely online, it’s easy to overlook things or dismiss an unfamiliar transaction. However, remain vigilant. Even if you don’t balance your checkbook every month anymore, know what’s going in and out of your bank accounts. Also monitor your credit, either through an alert system or one of the free credit monitoring tools available now. The quicker you notice a fraudulent transaction, the easier it is to resolve.
Other Tips to Safeguard Your Financial Data
Most people don’t carry their social security card these days, but if you’re still one of them, stop. If your wallet gets lost or stolen, it’s the single easiest piece of information to use against you. Other tips to safeguard your financial information include shredding unnecessary documents – not simply throwing old tax returns or bank statements in the trash – not saving sensitive documents to the Cloud, not clicking on suspicious links in emails, apps, or websites, and not logging in to your bank account or credit card account using a public internet network.
If you suspect you’ve been a victim of tax fraud, start by reporting it to the IRS using the link we provided above. You also must file a complaint with the Federal Trade Commission and put a notice on your credit report using any of the three credit monitoring agencies (Equifax, TransUnion, or Experian).
The tax professionals at Naden/Lean are always available to help. Contact us anytime at firstname.lastname@example.org.