The IRS, the states, and the tax industry, are committed to protecting you from identity theft. They have strengthened their partnership to fight the criminals and to devote themselves to serving you. Working together, they have made many changes and are making good progress to combat identity theft. The IRS has substantially reduced fraudulent returns and identity theft in the past two years.
However, cyber criminals are constantly evolving. The IRS is working hand-in-hand with state revenue officials, tax software providers and tax preparers. But you as a taxpayer need to take a few simple steps to better protect your personal and financial data online and at home.
Consider the following steps to protect yourselves from identity thieves:
Keep Your Computer Secure
Essential tools are:
- Use security software and make sure it updates automatically. An excellent one is Vipre.
- Install a virus/malware/internet security program. An excellent one is Vipre.
- Use file encryption for sensitive data.
- Treat your personal information like cash. Don’t leave it lying around.
- Check out companies to find out who you’re really dealing with and if they are legitimate.
- Give personal information only over encrypted websites – look for “https” at the beginning of the URL address.
- Back up your files on a flash drive or CD.
Avoid Phishing and Malware
Essential things to do are:
- (1) Avoid phishing emails, texts or calls that appear to be from the IRS and companies you know and trust. Instead, go directly to their web sites.
- (2) Do not open attachments and URLs in emails unless you know who sent it and what it is.
- (3) Download and install software only from web sites you know and trust.
- (4) On your web browsers, use a pop-up blocker and set the security level to medium high.
- (5) Talk to your family about safe computing.
Passwords:
- Use a combination of numbers, lower and upper case letters (but not in succession), and special characters.
- Use a different password for each important web site.
- Protect them. Do not give them to anyone or let them in the open. To have a record of them in case you lose the list of passwords, type them in a Word document and save them on a flash drive or CD. Do not save on them on the hard drive.
Protect Personal Information
- Don’t carry your social security card or other documents (for example, Medicare card-your Medicare number is your social security number) with your SSN in your wallet, pocket, or purse.
- Do not share personal information on social media. Information about past and new addresses,a new vehicle, a new home and your children help identity thieves pose as you.
- Keep old tax returns and tax records for at least six years under lock and key or encrypted if electronic. To prevent someone from accessing them, save tax and other files on a flash drive or CD, not the hard drive.
- Scan and save on a flash drive or CD credit cards, health insurance ID cards, vehicle titles, driver license and registration, social security and medicare cards and other important personal documents (for example, DD 214-military service discharge, and bank account records).
Avoid IRS Impersonators
The IRS will not call you with threats of jail or lawsuits or send you an unsolicited email suggesting you have a refund, that you need to update your account, or request any sensitive information online. These are all scams, and they are persistent. DON’T FALL FOR THEM.
Phone calls:
If you receive a call from someone saying they are from the IRS, do NOT give them any information they request. Instead:
- Ask for a call-back number, name of the person, and badge number.
- Contact the IRS to determine if the call was from them and if the person is an IRS employee with a legitimate need to contact you.
- If you determine the caller is legitimate, call them back. Report IRS-impersonation telephone calls.
Also, report such calls to the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC).
Emails:
DO NOT REPLY. Forward IRS related potential scam emails to phishing@irs.gov.
Paper Notifications received by mail:
Contact the IRS (there should be a phone number on the notice) to determine if it is a legitimate IRS notice and if a reply is required. If so, reply as soon as possible.
If not, report the receipt of the notice to the “Treasury Inspector General for Tax Administration”. If a tax preparer did your return, notify them as soon as possible and send them a copy of the notice. They will then contact the IRS and/or reply to the IRS notice.
Additional Steps
(1) Check your credit report for any suspicious activity by obtaining a report from each of the three national credit bureaus (Experian, Trans Union, and Equifax). By law, you are entitled to an annual FREE credit report from each of the three national credit bureaus. To obtain one, check out Annual Credit Report.
(2) Check your bank and credit card statements often. Most banks and other credit card companies have a secure web page where you can access your statements with up-to-date transactions. If you notice any suspicious or questionable transaction, notify your bank or credit card company immediately. Some credit card companies will call or email you if they suspect a questionable large charge, particularly from an on-line merchant or service. If you receive such an e-mail, do NOT click on the URL given to reply (it could be a phishing scheme). Instead go to the credit card company or bank web page and see if any notice of suspicious activity has been posted for your credit card. If there isn’t, call the bank or credit card company and tell them about the email. They may have an email address to report fraud. If so, forward the email to them.
(3) Review your Social Security records annually: Sign up for My Social Security.
(4) If you are an identity theft victim whose tax account is affected, review web site www.irs.gov/identitytheft for details. The IRS will assign you an alternate personal identification number (PIN) which can be used in place of your social security number on your tax returns. A new one will be issued automatically by the IRS each year.
(5) On your tax returns truncate your social number by entering only the last four digits and an “S” in place of the first five digits. If someone else prepares your return, ask them to do this.
New IRS Measures To Prevent Fraudulent Returns Being Filed
- The IRS will delay refunds until February 15 for returns with the child tax credit and earned income tax credit. These are refundable credits (if the credit exceeds the tax, the excess is refunded) and are the most frequent items entered on a fraudulent tax return.
- Starting in 2017 employers will be required to file W-2s and1099s with the IRS by January 31 (in prior years, it was June 30).
- Starting in 2017, for the 2016 tax year, the IRS started a W-2 pilot program which requires employers to enter a digital code on W-2s which is entered on form 1040 along with W-2 information. This is voluntary for 2016 returns but I highly encourage taxpayers and return preparers to enter this code on their tax return which will allow the IRS to stop a duplicate fraudulent return that is filed. If someone else prepares your return, request that they enter this code on the tax return. If the IRS receives two returns for a taxpayer and one return has the code and the other one doesn’t, they will know the one with the code is the l legitimate and reject the duplicate without the code.
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