Tax ID theft is the most common form of identity theft in the United States, and during National Tax Identity Theft Week (Jan. 30 to Feb. 3) BBB Serving Metro New York is reminding businesses and consumers to take steps to safeguard their tax identity.
Tax ID theft happens when an identity thief files a fake tax return using someone else’s Social Security Number (SSN), or uses someone else’s Social Security Number to get a job. It can also happen when an imposter calls you up, pretends that you owe money to the IRS, threatens you with jail if you don’t pay up instantly – and then demands payment or identity information over the phone.
It can even happen when a stranger claims your child as a dependent on a tax return, or files an improper return under your child’s name using a stolen SSN; when a scammer files a return under the SSN of a recently deceased person to steal money owed to the estate; or when a fraudulent tax preparer steals your tax refund. Reports of tax ID theft have grown in recent years as scammers and hackers find new ways to steal personal information from their victims.
“Tax ID theft is a growing menace to consumers and businesses,’ said Claire Rosenzweig, BBB President. “It’s more important than ever to safeguard your personal information – as well as that of children and elderly relatives - from identity thieves, both online and offline.”
According to the Federal Trade Commission, tax-related fraud was the most prevalent form of identity theft in 2015 (the latest year for which data is available), accounting for 45 percent of identity theft complaints, up from 32 percent in 2014.
Data breaches are a major source of information for tax ID thieves, and the IRS warns that victims of data breaches should monitor their credit reports closely, and contact the agency immediately if their tax return is returned as a duplicate.
Credit reports also provide a way to detect possible fraudulent activity using stolen SSNs belonging to children or elders. Most children should not have any credit histories, so the appearance of a credit record for a small child is a red flag. Improper accounts or debts may show up in credit records for older individuals. If you discover these kinds of issues, you can also check to see whether any fraudulent tax returns have also been filed with the IRS under the same SSN.
Consumers and businesses should also be mindful to shred any documents that contain personal information. ID thieves will sometimes rummage through garbage bins in search of documents with personal information that they can exploit.
Metro NY BBB Tips to Spot and Avoid Tax ID Theft:
Visit Metro NY BBB’s Facebook page or Twitter account for more tax ID theft related tips throughout the week of Jan. 30 to Feb. 3. For tips on how to avoid and recover from ID theft, including tax ID theft, in both Spanish and English visit bbb.org/new-york-city/identity-theft/.
For more consumer tips, or to search for a tax preparer you can trust, visit newyork.bbb.org. To view scam trends or report a possible scam, visit BBB’s Scam Tracker at bbb.org/scamtracker/new-york-city.