what you need to know about tax identity fraud

Ready or not, tax season is coming up! Unfortunately, this also means it’s prime time for tax identity fraud. Nobody wants to become a victim of this heartless crime, so we’ve provided some helpful tips and information you should keep in mind as you file this year.

what is tax identity fraud?

Tax Identity Fraud is when a scammer steals your personal information, such as your Social Security Number, to report false income data and take all your refund money as their own. Tax identity fraud can be related to other kinds of identity theft and can show up in several different ways. Unfortunately, there aren’t many early indications of tax-related identity theft, and you usually find out you’ve fallen victim after the fact, either from your tax preparer or the IRS.

how to know if you’ve become a victim of tax identity fraud:

1. You get a notice that your return was rejected by your tax preparer or the IRS because you are filing a duplicate return.
2. Records show that you have additional income from an unknown employer.
3. You receive mail from your tax preparer or the IRS that they’ve received a questionable return using your Social Security Number.

Once you realize your identity has been stolen, your next step should be to immediately report the activity. The IRS will work with you to resolve the issue, but this can be a long and tedious process. It’s important to do everything in your power to protect your information and prevent tax-related identity theft from happening in the first place.

how to avoid tax identity fraud

Tax-related identity theft can sneak up on you. All a thief needs to succeed in tax-related identity theft is your name, your social security number, and your birthdate. It’s critical that you keep your personal information safe and that you're extremely careful to whom you give the information.

1. protect your social security number

Identity theft centers mostly on your social security number, and it’s important to keep this information as private as possible. You should be very cautious of who you provide your social security number to. It never hurts to ask questions about why someone needs your social security number in the first place.

If possible, try to memorize your social security number. You should avoid carrying your card or any other documents that would have this information with you in your wallet where it can be easily seen or stolen.

Be diligent in deleting emails or shredding documents that have this information or any other identifying information on it before throwing them out. This includes credit card or bank statements, insurance forms, and even prescription drug labels.

pro tip: If you are unable to memorize your entire social security number, at the very least, try memorizing the last four digits.

2. file your taxes as soon as possible

Get to your taxes before the scammers do! We know filing taxes is not fun; however, getting your taxes done early could do a lot more for you than just scratching another task off your to-do list. The earlier you file your taxes, the less likely you will fall victim to fraud. 

pro tip: Use a private Wi-Fi network when filing your taxes online and be sure to use strong passwords for all accounts that have your personal information saved.

3. avoid phishing emails

Scammers will often say they work for the IRS to persuade you into sharing your personal information through emails, and they’ve become very convincing over the years of practice! However, just always remember that the IRS will never request tax payments by wiring funds or prepaid gift cards.

pro tip: The IRS will never call or text you! If you get a threatening call from someone claiming to be the IRS, you should hang up and block the number. The IRS will only communicate with you by physical mail.

start protecting your identity today!

Credit unions are in the business of helping you! And that includes helping you protect your personal information. Check with your institution on what services and perks they may offer to help you further protect your accounts. You can never be too cautious when it comes to your personal information and finances.

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