Identity theft is on the rise during tax season, and the IRS has been taking serious steps to combat this threat through prevention, detection and victim assistance. The agency stopped more than $63 billion in fraudulent refunds from 2011 through October 2014, and initiated 1,063 identity theft related investigations in 2014. Here are some smart ways to better protect yourself from tax fraud and ID theft.
The best way to prevent someone from fraudulently filing a tax return in your name is to file your taxes before they try to. You should start preparing all of your documents in advance so that you can file as soon as you receive your W-2.
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Secure personal documents
Critical documents such as birth certificates, social security cards, and passports should be stored somewhere safe and secure. You should also photocopy the contents of your wallet and store them in case they are lost. There are options ranging from a safety deposit box at your bank to a safe in your home. Determine what is most cost effective for you and your security.
Use your computer safely
You are your worst enemy when it comes to the loss of information on the computer. Select passwords that are difficult for others to figure out. Change your password often and protect your computer with anti-spyware and anti-virus software. Keeping your internet browser and computer software up to date is also very important. The best advice in using your computer safely is to only visit sites and click on links you trust. Don’t share your personal information anywhere that might be dangerous.
Beware of phishers
In 2014, the amount of IRS imposter complaints were up 2,300 percent due to criminals impersonating the IRS through phone calls and emails. If you receive a call from an unfamiliar number claiming to be the IRS and demanding money, hang up and report it. Fraudulent emails may contain fake links to a site intended to look like the IRS website. Never give out any personal information and do not respond to these email or phone inquiries.
Although these steps help you lessen the chances of becoming a victim, there is still a possibility that your identity could be compromised. If you have been a victim of ID theft or tax fraud, here are a few steps you should take.
- Report identity theft at www.ftc.gov and learn how to respond to it at identitytheft.gov.
- Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:
- Equifax, www.Equifax.com, 1-800-525-6285
- Experian, www.Experian.com, 1-888-397-3742
- TransUnion, www.TransUnion.com, 1-800-680-7289
- Contact your financial institutions, and close any accounts opened without your permission or tampered with.