It’s that time of the year again. As we prepare our tax returns, the IRS and other government officials are preparing for an increase in tax refund identity theft. While you’re dreading and worrying about your 1040′s, identity theft scammers are gleefully scheming of ways to steal your private information. Last year, the Internal Revenue Service paid out an estimated $5.2 billion in fraudulent tax refunds.
These thieves regularly pretend to be employees of the IRS in an attempt to convince taxpayers that their e-mails you receive are “official” communication solicitations. When you open the email, victims are tricked into revealing personal and financial information. Undoubtedly, the priority of these scammers is to try and get your credit card and bank account numbers, passwords, or your Social Security number. Armed with this type of information, these thieves will use this personal data to steal from your financial accounts, rack up charges on your credit cards, or open new loans under your name.
How do you know if your tax return or records have been affected? Taxpayers only discover they’re victims of tax refund identity theft when they attempt to file a legitimate return. The IRS will reject the tax return and typically sends a notification stating that:
- More than one tax return has already been filed
- There is a balance due or collection actions have been taken for unfiled tax returns
- The IRS has realized you’ve received wages from employers that you don’t know
With the prevalence of identity theft scams heading into the 2015 tax filing season, here are some tips taxpayers could follow to protect themselves, including:
- File electronically. The IRS suggests that consumers should file their taxes electronically.
- Lock your mailbox. Most thieves are also known to target your mailbox. With employers sending sensitive information like W-2s and other personal documents, consumers could lock their mailboxes to prevent thieves from accessing this mail.
- Sign up for fraud alerts. Placing a fraud alert on your credit report can help prevent your accounts from being used for fraud. Identity theft protection services offer such round-the-clock monitoring.
- Check your credit report. If you feel that you are a victim of identity theft, review your credit history to determine whether or not an identity thief has used your identity to conduct fraudulent activities.
- Avoid unsolicited calls. Remember that taxpayers will not be asked to reveal their personal in unsolicited calls. If you’re being solicited for personal information, listen to the alarm bells ringing in your head.
Scam artists are highly creative people. If you have doubts or suspect you’ve become a victim of identity theft, the IRS Identity Protection Specialized Unit is available for people to contact. Pick up the phone and call the agency.