Protecting Yourself Against Tax Identity Theft with the Help of the FTC

taxidentitytheft

If you’ve never thought (or worried) about identity theft before, then chances are that your outlook has changed in light of the recent data breaches at Target and Neiman Marcus. To further complicate matters, tax season is coming up. Given the fact that tax filings include an abundance of personal information (especially your social security number), it’s imperative to protect this information as much as possible.

To ensure that tax season doesn’t bring with it a whole new set of identity theft occurrences, The FTC (Federal Trade Commission) created Tax Identity Theft Awareness Week. Below we’ll talk about the FTC recommended measures you can take to protect your identity this tax season. Don’t forget to share these tips with your loved ones so that they too can better protect themselves!

The Problem of Identity Theft and Your Taxes

For many of us, there are few things in life more tedious than doing taxes. If you’re anything like me, you take all your paperwork to the local H&R Block and cross your fingers while waiting for them to give you the refund – or amount due – and then forget about the whole thing until the next year. However, taking a hands off approach to taxes like this could now become a liability. Not that there’s a problem with going to H&R Block – but there is an issue with paying as little attention to your filing process as possible. Why? Because tax identity theft – the practice of stealing Social Security and tax information – is growing.

Investor advocate John Wasik quotes some troubling statistics from the FTC in his latest article in Forbes:

“In 2012, tax identity theft accounted for more than 43 percent of the identity theft complaints, making it the largest category of identity theft complaints by a substantial margin.”

Wasik also cites earlier statistics from the FTC, showing that this 43% is up from just 15% in 2010. That’s why the FTC is taking action to educate consumers now so they don’t have to become a part of this statistic.

The FTC’s Recommendations to Help You Protect Your Identity

While there are no failsafe methods to protecting your identity, simple preventative measures can make a huge difference. Some of the FTC’s tips are:

  • File your taxes early in the season and respond promptly to mail received from the IRS.
  • If you file electronically, make sure you have a secure internet connection.
  • If you someone else prepares your taxes for you, research your preparer diligently and remember to shred any paperwork that you no longer need.

There’s also one very important red flag to watch out for in order to avoid a scam:

  • Know that the IRS will ONLY contact you via mail – not email, not telephone, and not social media. If you receive correspondence from someone claiming to be an IRS agent over email, phone, or social media, it’s a scam.

And finally, if you fear that you have already been victimized by tax identity theft, the FTC recommends that you contact the IRS ID Theft Protection Specialized Unit (1-800-908-4490). The sooner you take action, the better you can mitigate the damage and get your life back in order!

*For more information and protections you can put in place while doing your taxes, view this page on the IRS website - they’ve now put in place PIN number and other measures to protect your identity!

Image credit: jirsak

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