Tax identity theft is as terrifying as it sounds. Three million taxpayers have fallen victims to scams over the past four years. While such an invasion of privacy can affect anyone at any time- fortunately, thanks to H&R Block, the world’s largest tax services provider, there are significant ways you can protect yourself and your family from tax identity theft. H&R Block tax expert, Zia Parpia took time out from her busy schedule to outline a plan for your protection.
Q: How can someone protect themselves from tax identity theft?
A. Filing a fraudulent tax return using another person’s information may be a risk we only think of at tax time, but taxpayers and their information are vulnerable year round. The best way to protect your identity is to practice simple measures to keep your information private and secure.
1. Secure your information.
- Don’t carry your Social Security card in your wallet.
- Don’t give out your Social Security number (SSN) on the phone or in a public place. • Don’t send your SSN or date of birth in an email or a text.
- Never share an online user ID, password or PIN with others, and do not leave this information anywhere someone else can easily see or gain access to it, such as on a notepad or inside a folder marked “important papers.”
- When setting up a PIN or password, avoid easily guessed or common names and numbers: don’t use your mother’s maiden name, your children’s names, your birth date, Social Security number or phone number. Be sure to change your password regularly.
- Close unused credit card accounts and destroy the credit card. A personal shredder is a great tool to use on a daily basis.
- Request a copy of your credit report and keep tabs on who might be accessing it.
2. Don’t fall for scams.
- The IRS will never email you or connect on social media to request your personal information.
- The IRS will never call to demand immediate payment or ask for credit or debit card information over the phone.
- The IRS will never require specific payment methods.
- The IRS will always contact taxpayers by mail first about taxes owed.
However, even these methods may not prevent criminals from getting and using a taxpayer’s information. Taxpayers who are concerned about tax identity theft and want to take additional measures to minimize their risk of identity theft may want to investigate establishing an IRS Identity Protection PIN (IP PIN). The IP PIN will make it more difficult for thieves to file a fraudulent return using that individual’s tax identity.
Q. How can H&R Block help?
A. Additionally, H&R Block’s Tax Identity ShieldSM will provide tools and information to help clients better protect themselves from tax identity theft, including:
- Help setting up an IP PIN for eligible taxpayers
- A pre-tax-season scan of their potential risk of tax identity theft
- Early detection of any fraudulent returns submitted through H&R Block
- Expert guidance and support from H&R Block identity restoration specialists
Q: What are some examples of information valuable to identity thieves?
A. We may think of the basics, like your Social Security number and date of birth but you should also protect your:
- Name, address, telephone number
- Medicare card number and health insurance number
- Passport number, driver’s license number
- Financial account numbers (bank account or credit card numbers)
- Biometric data
Q: How does tax identity theft happen?
A. Criminals use personal information to file fraudulent tax returns (typically online) and receive a taxpayer’s refund before he files.
Many documents and records (e.g.: waiting room sign in sheets, job applications, student records, nursing home records) may contain a person’s Social Security number and are places where identity thieves may look to steal this information.
Q: What happens if I discover someone filed a tax return under my name?
A. Victims of tax identity theft can face several months or even years resolving the theft, resulting in significant delays in receiving their tax refund or filing their return. They may also face substantial paperwork and long interactions with government and legal authorities. Taxpayers may be responsible for proving that the return and income documents are fraudulent. Further, the taxpayer’s information may be at risk for other forms of identity theft.
Q: What happens after a taxpayer finds out they have been a victim of tax identity theft?
A. If you become a victim of ID theft, the things you should do are outlined below:
- Call and place a fraud alert on your credit reports with each credit bureau
- Close any accounts you believe may have been tampered with or opened fraudulently
- File a report with your local police and with police in the community where the identity theft took place
- File a complaint with the Federal Trade Commission by phone (1-877-438-4338) or online at www.ftc.gov
Q: How many people are victims of tax identity theft?
A. Since 2010, approximately 3 million taxpayers have fallen victim to criminals using personal identity information to file a fraudulent tax return and steal taxpayer refunds. In 2013, the IRS sent $5.2 billion to fraudulent filers.
Additional Resources: Consumer Tax Fraud: Source and Solutions Survey Findings
Zia Parpia is an enrolled agent with 30 years of experience. She currently works at the H&R Block office at 100 Miracle Mile, Suite 104, Coral Gables, FL 33134.
Areas of Expertise: Investments, Real Estate, Charitable Giving, ITIN, Foreign Income, Retirement, Multi-State Income, Farming, Clergy, Small Business, Tax Planning, Partnerships, Corporations, IRS/State Notices/Audits