You vs. Theft: Safeguarding Your Tax Identity
February 25, 2016 | James Purgason
Your Social Security Number (SSN) is yours, and yours alone. But you’ve put it in many different places. If you’re like most people, you’ve written it on job applications, insurance forms, bank documents, medical records, credit card applications, and beyond. Every year, you submit it with your tax return. And in today’s highly digitized world, it’s even more important to protect your identity.
Identity Theft By the Numbers:
It is reported that 9 million people have their identities compromised each year, according to a Federal Trade Commission (FTC) estimate.
During the first 2 months of 2016:
- 83 separate breaches of company data were identified by the Identity Theft Resource Center
- 19.3% included Social Security Numbers
- 1,600,831 personal records were exposed, at minimum
The institutions that have fallen prey include business, financial, educational, healthcare, and government (including the Department of Homeland Security). As a trusted business advisory firm, we believe it is important to keep consumers and business owners educated so they can better safeguard their information, year-round.
Tax Identity Theft – a Growing Form of Fraud.
According to the IRS, tax identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Tax identity theft is a growing aspect of fraud with multiple points of vulnerability, especially during tax season. If your SSN falls into the hands of criminals, they can use it to file a fraudulent tax return under your name. However, you can take steps to better protect your tax refund.
Reduce Your Risk.
More and more people are accessing their personal information in different places, such as on a coffee shop’s wi-fi or at the office. You can reduce your risk of tax identity theft by practicing the following throughout the year:
- When access the internet at your home or in public places that offer free wi-fi, be sure that the internet connection incorporates firewall and antivirus protection.
- Always use strong and unique passwords. The IRS recommends how to make a strong password here.
- Learn to recognize scam or “phishing” emails, and hang up the phone if a “financial institution” calls you uninvited. If your bank needs to get in touch with you, they’ll put a note in your account or send a letter asking you to call them.
- Do not click on links or download attachments in emails unless you know the sender.
- Keep your Social Security card in a secure place. The same goes for your tax return records, past and current.
- If you want to go even further, don’t give online retailers permission to keep your credit card on file. You can check out as “guest” on most websites, with a one-time form to fill out.
- When filing your taxes, use an accountant you trust. Ask a friend to refer you to one they trust. If you are a business owner go with an established accounting firm that specializes in your industry.
Contact HHM Certified Public Accountants for help during tax season – and beyond. Our CPAs are skilled at recommending ways for you to safely store your personal information.
If you find that your identity has been compromised, please visit identitytheft.gov and file a complaint with the FTC.