To itemize or not to itemize, deductions, exemptions, interest income and capital gains -- you have a lot to think about when you're doing your taxes. While you're preparing your return, don't overlook a consideration that's every bit as important as whether you owe or are due a refund -- tax-related identity theft.
Between 2011 and the end of 2013, the IRS says the agency caught and stopped 14.6 million suspicious returns, and doubled indictments and sentencings in fiscal year 2013. Criminals acquire taxpayers' Social Security numbers and personal information through a variety of means -- including data breaches, lost or stolen wallets or old-fashioned dumpster diving -- and use it to file fraudulent returns in the hopes of getting a refund.
"Tax identity theft is particularly insidious because it targets Americans during a vulnerable, hectic time," says Trey Loughran, president of the personal solutions unit at Equifax. "The sheer volume of tax identity theft cases reported by the IRS is astounding. Consumers need to be aware of this growing problem and what steps they can take to help protect themselves."
Fortunately, certain steps can help Americans minimize tax identity theft risks:
Don't wait to file.
Filing early makes it less likely an identity thief will file first using your name and information. If a crook does attempt to file a fraudulent return in your name, the IRS will be better able to flag it if the agency already has your valid return in hand.
Guard your mail.
During the first months of the year, many important tax documents move through the mail and identity thieves know this. They may steal W-2s, financial statements and other important documents right out of your mailbox. Consider using a locking mailbox or a post office box to receive and send tax documents, or e-file.
Protect your PC and all your digital devices.
E-filing can be a fast, efficient way to do your taxes, but you must protect your computer with up-to-date anti-virus and anti-malware software, and use a secure Internet connection. Password protect all your devices.
Don't fall for scams.
If you receive an email, text or phone call that purports to be from the IRS, don't respond -- especially if the request is for personal information. The IRS only contacts you through postal mail, and will never ask you for your personal information.
Vet your tax preparer
Vet your tax preparer through the Better Business Bureau to ensure you're dealing with a legitimate tax prep service. Never sign a blank return for someone else to complete.
Protect children and seniors
To protect children and seniors, consider completing Form 8821, which authorizes a person to receive all IRS communications for the individual named on the form. The authorization ensures that if a criminal files a return using your Social Security number or that of a dependent child or senior adult, you'll receive all IRS communications.
Contact the IRS
Contact the IRS Identity Protection Specialized Unit immediately if you receive a notice from the agency stating more than one tax return was filed for you, that you have a balance for a year you didn't file, or that you received wages from an employer you don't know. You'll also need to file a police report and complete an identity theft affidavit.
"Tax return fraud continues to be a growing threat," Loughran says. "Taking protective measures can help taxpayers avoid becoming victims of tax identity theft."
Courtesy of Brandpoint© 2014 Brandpoint
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