According to a recent Allstate Insurance survey, nearly two-thirds of people are concerned about scammers stealing their personal information to file fraudulent tax returns. Tax identity theft occurs when someone uses another person’s Social Security information to file a false tax return, with the goal of collecting the refund.
Resolving tax refund theft takes an average of 22 months. However, taxpayers can take proactive steps to protect themselves from becoming victims.
Financial experts advise filing your tax return as early as possible. This reduces the window of opportunity for fraudsters to file a return in your name. The deadline to file your tax return for income earned in 2024 is April 15.
The Internal Revenue Service (IRS) also recommends obtaining an Identity Protection PIN (IP PIN). This is a six-digit number issued by the IRS that is linked to your tax return. Victims of tax-related fraud must include this PIN on each subsequent tax return. However, taxpayers can request an IP PIN proactively for enhanced security. You can request an IP PIN on the IRS website, and you will receive a new one in the mail each year.
The internet can be a powerful tool for scammers, but you can take steps to protect yourself. Maintaining healthy online habits can help prevent fraud. Use strong, unique passwords for your online accounts. If you file your taxes online, avoid clicking suspicious links and consider using anti-virus software.
