On January 31, the IRS will start processing income tax returns. This day also marks the beginning of one of the busiest times of year for identity thieves looking to cash in by filing false returns.
Tax identity theft is a growing issue. In 2010, almost 15 percent of all identity theft complaints to the FTC were related to tax returns. In 2012, this number increased to 43 percent. The growth continued in 2013.
Why this quick growth? Tax identity theft is a relatively easy crime to commit. All an identity thief needs to file a false return is a Social Security number and forged forms. However, the ways to combat tax identity theft are a little more complicated. Here are some tips to decrease your chances of becoming a victim:
- File early: This is perhaps the most important and effective tip to avoid tax ID theft. The earlier you file your taxes, the earlier the IRS processes them and the smaller the window that leaves for identity thieves to file using your information. Once you file your return, an identity thief won’t be able to collect on your Social Security number.
- Protect your Social Security number: This tip applies to all forms of identity theft, but is particularly relevant when tax time rolls around. Guard your Social Security number. Shred any documents that include the number. Don’t put it on forms or share it when it is not needed. Don’t carry your Social Security card in your wallet. If an identity thief doesn’t have your Social Security number, they can’t file for a tax refund on your behalf. There are services available that will monitor your Social Security number and send an alert if a fraudulent name or address becomes associated with it.
- Keep an eye on your mail: Tax documents like your W2 are usually sent via mail in envelopes marked “tax documents enclosed,” making them easy marks for identity thieves. The typical W2 not only lists your earnings for the year but also your name, address and Social Security number. Consider investing in a mailbox that locks or a P.O. box. At the very least, check your mail frequently.
If you have been the victim of tax fraud there are a few things you need to do to ensure you get your return and reduce the risk of it happening again:
- Contact the IRS ASAP. You can reach the IRS Identity Protection Specialized Unit at 800.908.4490, extension 245.
- File the IRS Identity Theft Affidavit, Form 14039. This form will help prevent future occurrences of tax-related identity theft.
- Contact the fraud departments of the three major credit bureaus. This will help prevent identity thieves from misusing your personal information for other things such as securing a loan or opening up a credit card.
Have you been a victim of tax-related identity fraud? What was your experience like? As always, let us know what you think on Twitter and Facebook, and be sure to check out our Tumblr for the latest industry news stories.