The Trouble With Tax Returns

The side effects are nothing new. Tax season: may cause anxiety, nausea and depression. But an accurate return is only half the battle. The latest gripe? Identity theft tax fraud. Go ahead and add it to your list of tax season woes. 

From 2009 to 2011, the IRS estimates that 404,000 people were victims of identity theft tax fraud. And it’s only getting worse. The IRS saw a huge increase in this type of crime  from 2010 to 2011.

Think about what’s on your tax return: personal information, employment history, loan details, banking data, birthdates and that coveted Social Security number.

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That’s a lot of information on one document. In fact, it’s a PPI gold mine. What’s PPI? It’s your protected personal information. And it’s hidden treasure to identity thieves.

The goods news is the IRS has improved its ability to detect tax fraud, stopping nearly $1.5 billion in fraudulent refunds. The bad news? With over 100 million tax refunds to process each year, the IRS can’t catch everything.

And that’s only half of the problem—it doesn’t stop at tax fraud. With that much information, an identity thief could commit a long list of crimes.  

As we apprehensively near that looming April deadline, try not to get too overwhelmed or stressed. Instead, take some time for a few extra precautionary steps. The safety of your information is just as important as getting your taxes done. 

Here’s five tips to secure your PPI during tax time:

1. Secure your connection

If you e-file, do not login on public Wi-Fi. Instead ensure you’re on a private, protected Internet connection. Also be sure that you are on a secure website (look for the “https:” in your browser’s address bar) and on a computer with a working anti-virus system.

2. Don’t get phished

The IRS will never contact you through email, so do not respond if you receive any emails claiming to be from the IRS. They could be fraudsters trying to trick you into providing personal information. Learn more about protecting yourself against phishing attacks here.

3. Lock up your returns

What’s worse than getting robbed? Getting robbed AND getting your identity stolen. Keep all of your tax information and returns in a locked safe. And don’t keep old tax information stored on your computer. It should all be in that locked safe—print out a hard copy or move it onto an external hard drive.  

4. Stay off of file-sharing programs

Many people use file-sharing programs to download music or movies. These types of websites put users at a serious risk of being hacked, often times without being detected. Once they’ve hacked your computer, identity thieves could steal tax information right off of your hard drive.

5. Trust the experts

Make sure that your tax professional is licensed, affiliated with a professional organization or listed with the Better Business Bureau, the state board of accountancy or another trusted institution.

Source: “IRS Faces Surge in Identity Theft Tax Fraud.” February 17th 2012.

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