Identity Theft

3 Ways to Avoid Identity Theft Tax Scams


Tax-related identity theft scams are serious problems which affect people of all ages across the United States each year.



Tax-related identity theft scams are serious problems which affect people of all ages across the United States each year. According to the IRS, identity theft tax refund scams recently ranked as its number one scam. (1)

Many people think there is little within their control to prevent criminals from attacking their identity, and while it is true that scammers are becoming more creative, fortunately, there are several things you can do yourself to help minimize the risk.

Here are some tips to help you avoid being a victim of an identity theft tax scam:

1. Avoid giving out any personal information.

This step is likely the most proactive and effective course you can take to prevent having your identity stolen. You’ve heard for a long time about the importance of shredding personal documents, but now there is another front in the war against identity theft: the internet. As information sharing via the internet becomes more common, so does the ability for criminals to get access to your personal information. Something that may seem like an insignificant detail to you, like listing your birthday on social media, for example, could be the missing puzzle piece to a criminal’s plan to file your tax return on your behalf. We encourage you to be as vigilant as possible when protecting your personal information online. Also, be aware of fraudulent communications impersonating the IRS asking for your personal information via phone calls, email, or texts. For more tips on avoiding IRS-impersonator telephone scams, you can read our article here: https://www.rabobankamerica.com/customer-education/taxes/proactive tax security information

2. Avoid shady tax preparers.

This step is your second line of defense. If you’ve been proactive about safeguarding your personal information, continue being suspicious of anyone who offers you an unrealistic tax return – it’s a red flag! You can never be too careful when it comes to filing your tax return. A tax preparer may claim they know loopholes or may try to persuade you to blur the numbers, but take a step back and question their motives. If someone is willing to compromise their ethics to earn you a higher return this year, who is to say he or she will not take your sensitive personal information and file on your behalf the following year to collect your return? Also, keep in mind if you are audited by the IRS, they will hold you personally responsible for all information filed in your return, so be aware of someone attempting to fudge the numbers to earn you a higher return.

3. File your taxes as early as possible.

This step will help you beat the criminals to the finish line of filing your tax return. Gather all your necessary documents and get a jump start by filing your taxes as early as possible. Plus, another perk of filing early is that you will avoid being stressed last minute if you wait until the deadline to file. When it comes to your taxes, it is best to be extra careful and extra proactive. Keep in mind, taxes only come around once a year, so be sure to put all your effort and focus into keeping your sensitive information private, and filing accurately and in a timely manner.

According to the IRS, taxpayers who believe they are victims of identity theft should contact the IRS immediately so the agency may secure their tax accounts. You may call the IRS Identity Protection Specialized Unit at 800-908-4490 for more help and information. (2)

The information contained in this article is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.

Sources and more information:

1. Internal Revenue Service (IRS) website, http://info.guardiananalytics.com/rs/guardiananalytics/images/FraudUpdate_TaxFraud.pdf?mkt_tok=3RkMMJWWfF9wsRolvqjAZKXonjHpfsX56OopUKC/lMI/0ER3fOvrPUfGjI4FRMJlI+SLDwEYGJlv6SgFQrXFMbZmzrgOWRk=

2. Internal Revenue Service (IRS) website, https://www.irs.gov/uac/Newsroom/IRS-Releases-the-Dirty-Dozen-Tax-Scams-for-2013

3. Treasury Department website, https://www.treasury.gov/tigta/auditreports/2012reports/201242080fr.html





The information contained in this article is intended for general educational purposes only and is not to be construed as legal, tax, or financial advice. Please consult with your own legal, tax or financial advisor for guidance with your own particular circumstances.

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