10 Tips to Help Avoid Tax ID Theft

  
     
February 12, 2014

 Tax season is here and the IRS says it emphasize online services and automation this year to help us navigate the hectic tax filing season. The Better Business Bureau Serving Greater Kansas City encourages people to abide by the following tips in order to avoid a rapidly growing scam, tax identity theft.


Tax identity theft happens when someone files a phony tax return using your personal information — like your Social Security number — to get a tax refund from the IRS. It also can happen when someone uses your Social Security number to get a job or claims your child as a dependent on a tax return. Tax identity theft is the most common form of identity theft reported to the Federal Trade Commission. The IRS says tax identity theft is a top priority and says it has hired new staff, explored new technologies, and adopted new procedures to fight it.


According to the FTC, you might find out you’ve been a victim of tax identity theft when you get a letter from the IRS saying more than one tax return was filed in your name, or if IRS records show you have wages from an employer you don’t recognize. To avoid tax identity theft:

 

1. File your tax return early in the tax season, if possible.

2. Use a secure internet connection if you file electronically, or mail your tax return directly from the post office.

3. Shred copies of your tax return, drafts, or calculation sheets you no longer need.

4. Respond to all mail from the IRS as soon as possible.

5. Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail.

6. Don’t give out your Social Security number (SSN) unless you initiate contact and know exactly to whom you’re giving the information.

7. Research a tax preparer thoroughly before you hand over personal information.

8. Don’t fall for the promise of big refunds. Be wary of any tax preparation service that promises larger refunds than the competition, and steer clear of tax preparers who base their fee on a percentage of the refund.

9. If your SSN has been compromised, contact the IRS ID Theft Protection Specialized Unit at 1-800-908-4490.

10. Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.

 

What if you’re a victim? Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in their name, or IRS records show they received wages from an employer they don’t know. If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. –

 

Don’t forget about Free File! If your adjusted gross income is $57,000 or less, Free File offers free Federal tax preparation and e-filing. Visitirs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free to learn more.

According to the IRS, many tax preparation software companies will begin accepting returns in January and hold those returns until the IRS systems open at the end of this month. This includes the Free File partners that offer access to their software for free at freefile.irs.gov.

The IRS will not process any tax returns before January 31, so there is no advantage to filing on paper before the opening date. Taxpayers will receive their tax refunds much faster by using e-file or Free File with the direct deposit option.