This is part one of a two-part series celebrating Tax Identity Theft Awareness Week.
Imagine this scenario: You put together all your tax information and file with the IRS on time. Then, instead of an anticipated refund, you get a letter stating that a return was already filed under your Social Security number. Or you receive a notice that you failed to pay taxes on part of last year’s wages, but it’s for an employer you don’t know, for a job you never had.
This is tax identity theft — when a thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund, or to obtain a job under an assumed name. Either way, it could be your information that’s being used for the scam.
Learning to spot the signs of IRS identity theft can help you protect your information and financial assets.
On the Hook
There are so many tax identity theft schemes in play that we’re going to tackle them in two parts. First, let’s focus on email-based scams, also called phishing.
For years, the IRS has been issuing alerts about phishing scams done over email and via text. Taxpayers receive a message that purports to come from the IRS, with links to “new” information about tax rules, requests for financial data, offers for Web-based products or dramatic warnings about fines.
Stopping this fraud has become a top priority for the IRS, and last year, the agency assigned more than 3,000 employees to work on tax identity theft issues. From 2011 to 2013, the IRS has stopped 14.6 million suspicious returns.
Tips for Protection
In addition to relying on the IRS’ efforts, there are strategies you can use to protect yourself from tax identity theft. Here are some top ways to fight phishing:
- Never trust an email or text that claims to be from the IRS. The agency never contacts taxpayers through those methods of communication.
- Scammers rely on scare tactics to get financial information and will often send emails that inform recipients about impending checking account deductions or rejected tax forms. Just ignore these emails.
- The address of the official IRS website is www.irs.gov. Be wary of links to any site claiming to be IRS-related, but ending with .com, .net, .org or other domain suffixes.
- Keep in mind that the IRS doesn’t offer Web-based products for the general public. The IRS e-Services page has products for tax preparers. But if you’re seeing an ad for an IRS product that allows you to file your personal taxes, stay away.
- Be suspicious of general IRS announcements made online. Phishing scams in the past have used fake news alerts about new tax filing deadlines, regulations or laws. These always include a link “for more information” that leads to a malicious site designed to collect your financial information.
As you’re navigating the online ads and apps for tax preparation, keep IRS identity theft in mind. Tax Identity Theft Awareness Week — January 26-30 — might last only five days, but the repercussions of a tax identity theft attack can linger for years. By protecting your information and staying vigilant about potential threats, you can thwart the identity thieves before they nab your data.
Coming up next on the IdentityForce blog: part two of our look into tax identity theft, focusing on mail and phone scams.
Image courtesy of Flickr user John Morgan.