This type of theft is particularly pernicious because the legitimate taxpayer may have no way of knowing that fraud has been committed. Often, the fraud will only be detected when a taxpayer receives a notice from the Internal Revenue Service (IRS) or state tax authorities of a problem with their return.
Unfortunately, there is no foolproof way of avoiding tax identity fraud. Since social security numbers and other personal information are so widely available on cyber black markets, chances are that scammers already have the information they need to commit tax identity fraud against many, if not most, American consumers.
However, there are steps that can be taken to reduce risk to the extent possible. These include:
- Review your credit report for any suspicious activity (such as lines of credit opened without your knowledge). Free credit reports for all three (3) major credit reporting bureaus can be obtained at www.annualcreditreport.com.
- When asked to provide a social security number to a business or other entity, ask if there is another form of identification that can be used (such as a driver’s license, phone number or mailing address). This will help slow the spread of the critically important social security number to potential identity thieves.
- Check your annual Social Security Administration earnings statement carefully. If there are earnings listed that you don’t recognize, someone else could be using your identity to obtain employment.
- Don’t give out personal information, such as your social security number, date of birth, or bank account information in response to unsolicited emails, postal mail, over the phone or via text message, social media or another platform.
- Install antivirus software and personal firewalls on your computer and make sure to install all operating system and browser patches promptly.
- Change passwords on your online accounts regularly. Be sure to use different passwords on each account. If an online service (like email, social network, bank accounts, etc.) offers more secure technology, such as multi-factor authentication, turn it on.
- And remember, the IRS will NEVER call about taxes you owe without first mailing you an official notice.