With numerous high profile data breaches last year at firms such as Equifax, the idea of someone stealing your personal information and identity is not only scary, but more of a reality to many people. During tax season, it’s an even greater threat. According to the U.S. Federal Trade Commission, tax identity theft (also known as “tax refund fraud”) is a lucrative and growing problem for many U.S. taxpayers. Unfortunately, you don’t know you’re a victim of tax identity theft until it has already happened. Here’s a few tips to help you avoid tax refund fraud.
What to do: If you realize one of these warning signs that points to being a victim, you should file IRS Form 14039 (“Identity Theft Affidavit”) to alert the IRS of the situation. You still need to pay your taxes and file your return, even if you must do so by paper.
In addition, you should file a report with your local police, file a complaint with the Federal Trade Commission (www.ftc.gov/complaint), and contact the three major credit bureaus (Experian, Equifax, and Trans Union) to place a fraud alert on your accounts.
Equifax – 888-766-0008
Experian – 888-397-3742
Transunion – 888-909-8872
How to better protect yourself: One of the best ways to prevent tax identity fraud is to file your tax return as soon as you possibly can, no matter if you’re expecting a refund or if you owe money. This way, if you’ve already filed a return, it means a fraudulent return is unable to be filed in its place. Also, be vigilant to always protect your Social Security number. Don’t carry your card with you. Just because a business asks for your number doesn’t mean you must give it – only offer if it’s mandatory.
At Total Wealth Planning, our goal is to enrich lives through financial guidance. Sometimes, this means to not only grow and protect your money, but also offer holistic guidance for protecting your identity and making your tax filing a bit easier. This tax season, use these tips to be on the lookout for anything suspicious. And if you do become a victim, be sure to act quickly.
