Identity theft is always in the news these days and as a member of the IRS Security Summit, every email I get has new information about what identity thieves are trying to do. The Summit is a collaborative effort between the IRS, state tax agencies, members of the leading tax preparation firms, tax software developers, and other financial partners to help protect taxpayers from tax-related identity theft. Typically, tax-related identity theft involves someone using your Social Security number to obtain a refund. There are many other forms of identity theft too, from child identity theft and medical identity theft to social media identity theft and tax ID theft.
Although we have become more sophisticated and vigilant about protecting our information, thieves keep finding new ways to attack. Just this past April, I had what I believe was an identity thief call me at home pretending to be from the IRS and screaming at me about owing money to the IRS and I better pay him right then and there. I was lucky and realized right away that it was a fraudulent claim and did not give any information; however, not everyone realizes they are about to be scammed and many intelligent people have fallen victim to these scammers. I bet you or you know someone who has also had one of those fake calls asking for data or money or credit card information or at least one of those emails. And though we are reminded all the time, I would be remiss if I didn't mention here, the IRS and other authorities will NEVER ask for money via PayPal, on an iTunes or other prepaid card, or in cash.
- Protect Personally Identifiable Information - Do not carry your Social Security card or birth certificate with you and only supply the information when required. Many times, much like when asked for your telephone number or email at a checkout line, you can simply decline.
- Use Firewalls and Strong Passwords - Use a long password with a mixture of upper and lower case letters, numbers, and special characters (when allowed) and change that password on a regular basis. Install a firewall that includes anti-virus protection on your computers and keep your software up-to-date.
- Inspect Your Statements and Reports - Check your credit report and Social Security Administration earnings statement annually. Verify your credit card and bank statements are accurate every month. Use alerts so you know as soon as it happens when anything out of the ordinary occurs.
Of course, there are many do's and don'ts when it comes to protecting yourself and the IRS and Federal Trade Commission have great resources available including checklists and steps to take if your identity is compromised in any fashion.
The good news on the tax-identity theft front is that the Security Summit partnership reported last week that "Summit partners (IRS, state tax agencies, and private-sector tax industry executives) protected more taxpayers from tax-related identity theft, stopped more suspicious tax returns and prevented more fraudulent refunds from getting into criminal' hands" based on the efforts that took place in the first year of the collaborative effort. And this year you will see some of the actions that are designed to help. For example, if you use DIY tax preparation software this year you will notice passwords require a minimum of eight-digits and you will have to establish security questions.
The bottom line, fewer people became victims of tax-related identity theft during the 2016 filing season and the IRS has enhanced their efforts to help taxpayers who have become victims. Though, typically, I say, it is your money - keep more of it, this time I am reminding you, it is YOUR money - make sure nobody else is getting it!