Straight Talk: Safeguarding Your Identity from Tax ID Theft
By Better Business Bureau Special to The Canton Repository
As tax season approaches, it’s not just taxpayers and businesses that are preparing – scammers are too. Tax identity theft poses a significant threat, and the Better Business Bureau (BBB) is offering eight essential tips to protect your sensitive information.
How Tax Identity Theft Works
Scammers often target online filers expecting refunds. They obtain personal information, such as a Social Security number or Social Insurance Number, address, and birth date, and then file a fraudulent return early, claiming the refund before the legitimate taxpayer. Victims may not realize what happened until they attempt to file their own taxes.
Tax identity theft scams can employ various tactics, including:
- Phishing scams
- Corrupt tax preparation services
- Data breaches
Criminals also exploit the identities of deceased individuals or steal children’s identities to claim them as dependents.
Eight Tips to Avoid Tax ID Theft
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File Early: One of the best defenses against tax identity theft is to file your taxes as soon as possible, before a scammer can use your information.
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Watch Out for Red Flags: If you receive a notice from the IRS or CRA about a duplicate return or wages from an employer you never worked for, respond or contact the agency promptly. Notices indicating additional taxes owed or a refund offset for a year you did not file a return should also be immediately reported.
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Secure Your Personal Information Digitally: Use strong passwords for online accounts, enable two-factor authentication, and avoid storing sensitive tax documents on unsecured devices or cloud storage.
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Avoid Filing Taxes on Public Wi-Fi: If you file taxes electronically, avoid using public Wi-Fi networks that might be vulnerable. Use a secure, private network or a virtual private network (VPN).
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Protect Your Social Security Number or Social Insurance Number: Don’t give out your SSN or SIN unless there’s a valid reason and you are certain of the recipient’s identity.
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Research Your Tax Preparer: Ensure your tax preparer is trustworthy before sharing your personal information. Check their credentials and online reviews.
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Use Your Identity Protection PIN (IP PIN): In the United States, the IP PIN, a six-digit number, adds an extra layer of security. If you have filed previously and lost your PIN, the IRS can help you retrieve it. The IRS can provide more information at IRS.gov.
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Shred Sensitive Information: Shred old tax forms and documents containing your personal information to prevent dumpster divers from accessing your data.
Resources
For more information on tax identity theft scams and how to avoid them, visit bbb.org.
If you are a victim of tax identity theft:
- Contact the IRS at 1-800-908-4490.
- File a complaint with the Federal Trade Commission (FTC) at ftc.gov/complaint or by calling 1-877-FTC-HELP.
- The FTC also offers a personalized identity theft recovery plan at identitytheft.gov.
