Tax Identity Theft: How to Avoid It and What to Do if You Are a Victim

By | January 23rd, 2014|Uncategorized|

Tax tips picOn 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.

News Recap: IRS Reports Increase in Tax ID Theft

By | January 10th, 2014|Uncategorized|

Tax ID BlogAs the opening of tax season approaches, concern for the identity protection increases – and new reports confirm that the risk for tax identity theft is real.

According to the Associated Press, The IRS has reported a significant increase in the number of identity theft cases in 2013. AP quotes the agency, saying “[As of] Tuesday it launched 1,492 criminal investigations into identity theft last year, a 66 percent increase from the year before.

Prosecutions and indictments more than doubled.” The AP also reported on the growth pattern of identity theft and fraudulent tax returns, saying, “The issue has exploded in just a few years. In the 2011 budget year, the IRS recommended 218 cases of suspected identity theft for prosecution, a number that grew to 1,257 last year. The number of indictments grew from 165 to 1,050 in the same period.” reporter Mike Godfrey described the steps the IRS is taking to prevent identity theft and tax return fraud, which include significant increases in hiring as well as training for employees. As for steps the IRS is taking to protect and advocate for victims, Godfrey reported, “the IRS pointed to the expansion of Identity Protection PIN (IP PIN) numbers… Furthermore, the IRS continues to dedicate more employees to resolution of victim cases that are usually extremely complex to resolve, frequently involving multiple issues and multiple tax years.“

This year, the FTC is hosting “Tax Identity Theft Awareness Week” from January 13th to the 17th. Take a look at their website to find out how you and your business can participate in Tax Identity Theft Awareness Week.

What else should the IRS do to prevent identity theft and tax return fraud? What steps should individuals take in order to protect themselves? Let us know what you think on Twitter and Facebook, and be sure to check out our Tumblr for the latest industry news stories.

Taking Measures Against Affordable Care Act Scams

By | October 2nd, 2013|Uncategorized|

This guest post comes from Michael Cahill, editor of the Vista Health Solutions Blog. He writes about the health care system, the health insurance industry and the Affordable Care Act.

For many American families, the Affordable Care Act (ACA) is going to make health insurance costs that much better. However, stories of scammers have made many people worried that they will be on the receiving end of a health care con. This does not have to be you. By putting the following information into action you can be sure that you won’t be a sitting duck for cyber criminals.

#1: Knowing Is The Best Defense

The ACA may seem like an intimidating piece of legislature, but the basics are not too hard to get a grasp of. Realize what your options are inside and outside of the marketplace, and understand how the ACA is affecting Medicaid, employers and individuals. The government has provided a lot of great resources for learning about the new law. The Department of Health & Human Services has a good primer here, and has a ton of information. For those feeling ambitious, you can read the bill itself at the first link.

#2: Stay Skeptical

One of the most common scams is people pretending to be government workers. In short, if they ask for information that they should know or that they don’t need, they are probably scammers. When it comes to sensitive personal information, government workers know what they need to know, and that certainly doesn’t include your bank account number. The navigators working for the government are there to help you understand the new system and choose the plan that is right for you, not to sell you a plan.

#3: Don’t Be An Easy Target

You might think that stealing your online identity requires someone to have a great deal of finesse and skill. In fact, it isn’t that complicated. A lot of sites use secret questions to make password recovery more secure. However, secret questions that ask for things like your father’s middle name or your mother’s maiden name can likely be answered after someone spends a few minutes on Google. For added security you can try a few things with your secret questions. For one, you can choose questions that don’t have easy to find answers such as your childhood best friend’s first name. Alternatively, you could make up an unrelated answer that functions as another password of sorts. It could even just be a string of random letters and numbers.

#4: Put Your Information To Use

The reality is that you have had a long time to get ready for the ACA’s changes to the healthcare system. If you haven’t sat down and worked out what you are going to do, you still have time. The marketplace will offer many options to choose from. Figure out how much coverage your family will need and how much you are willing to pay.

Before looking at the marketplace’s offerings, you might want to see if you qualify for options like Medicaid. Some states have chosen to accept the federal Medicaid package which will allow thousands more to be covered by the program.

By knowing what is available to you and having an idea of what you are going to choose, you can ignore all the noise from scammers trying to push a “discount health plan” as health insurance.

#5: Realize That The ACA Isn’t Set In Stone

The ACA, like most pieces of legislation, is a long document. The truth is that won’t know what those hundreds of pages really mean until we see the law in action. We can expect to see some modifications happen. When the marketplaces open on October 1st, take note of what is being talked about in the media. Whatever surfaces as a big talking point may just be where you can expect to see some change.

It is no fault of the ACA that scammers are trying to take advantage of it. It is only you who can protect yourself.

Industry News Recap: Holiday Scams

By | February 18th, 2013|Uncategorized|

holiday_scamsThe holidays are a time to celebrate with family, friends and loved ones, but the holidays are also filled with scams. With Valentine’s Day festivities come and gone, it’s an opportune time for thieves to prey on victims when they’re most vulnerable – in love or alone. Here’s a recap of some of the top holiday scams to look out for around Valentine’s and any holiday season.

USA Today reported that money transfer companies, like MoneyGram will make more than 30 calls today to victims of romance scams. “Scammers can prey on victims’ loneliness following the holiday season, which grows leading up to and just after Valentine’s Day,” says Kim Garner, senior vice president of global security and investigations for MoneyGram.

Yahoo! News noted that scammers are infecting singles, too. They know that if you’re not shopping for that special someone, you’re probably looking for him or her. They hope to infect computers with malicious email attachments or to direct potential victims to Web pages where private details are demanded.

Thinking about signing up for an online match service? Think again. PCMag said that cyber criminals are creating phony profiles and using them to steal identity information and financial information from their unlucky-in-love victims. They include details that many people look for in a potential mate—someone who is wealthy, has a steady job, and is looking for that special someone to “love” and “trust.”

For a complete laundry list, check out BitDefender’s top 10 scams for Valentine’s Day. Be sure to show your loved one that you care by being aware of these scams around Valentine’s and any other holiday.

Have you come across one of these scams before? Let us know in the comments section below or on Twitter and Facebook. Also, be sure to check out our Tumblr page for the latest industry news stories.

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