As tax season reaches its climax, the risk of falling victim to scams is escalating. On April 2, the FBI issued a critical alert cautioning the public about criminals stealing U.S. taxpayer identities to file fraudulent tax returns and claim refunds illegally. According to the FBI’s warning, “Stolen refunds are often redirected by criminal actors to accounts or addresses they control.” These include bank accounts, prepaid debit cards, mail drops, and third-party accounts. The FBI’s Internet Crime Complaint Center has received over 1,000 complaints regarding identity theft related to tax returns in the past year, marking a 26% increase from the previous year.
To combat this growing threat, the IRS recommends that taxpayers set up an Identity Protection Personal Identification Number (IP PIN). This six-digit PIN is designed to prevent scammers from using Social Security numbers to file false tax returns. Taxpayers can enroll in the IP PIN program by creating an account on the IRS website. The PIN is reset annually to enhance security.
The IRS also provides additional tips to prevent identity theft, including closely monitoring accounts and financial reports, and using complex passwords for IRS accounts. Victims of identity theft are urged to file a complaint with the Internet Crime Complaint Center.
Protecting Yourself from Tax-Related Identity Theft
The IRS emphasizes the importance of proactive measures to safeguard personal information during tax season. By understanding the risks and taking steps to mitigate them, taxpayers can significantly reduce their chances of falling prey to these increasingly sophisticated scams.
