Tax Day is on the way, and many people will be scrambling to meet the April deadline. However, filing your returns in a timely fashion isn’t the only thing to worry about. Tax-related identity theft is a growing threat.
In fact, per a 2012 study by the U.S. Government Accountability Office, the number of known incidents has increased more than twelvefold since 2008; and according to the Wall Street Journal, over $5.2 billion of taxpayer money went to those who filed fake returns in 2011. These statistics reflect how real tax-related identity theft can be.
One of the best ways to prevent being a victim of tax-related identity theft is to be educated about how it can happen and alert for potential warning signs. Sometimes the identity thief uses a name and stolen Social Security number and fake W-2 forms to collect a refund in the victim’s name. Other times, the thief uses stolen information to get a job, which later creates problems when the government wants taxes on income the victim never earned. A thief also can create a fake website to lure innocent taxpayers into filing their returns (and revealing personal information) online.
How do you know if you’re a potential victim of tax-related identity theft? For one thing, if you receive notice from the IRS that more than one tax return was filed in your name, or that you’ve received wages from an unknown employer – pay attention. Another warning sign is receiving an email from the IRS requesting your personal information. This is likely to be a scam, because the IRS doesn’t request personal details through email.
One of the best ways to protect yourself is to file your taxes early. However,if it’s too late and you’ve been affected, there are a few steps that should be taken immediately. First, contact your insurance company to see if you receive identity management services. Other recommendations from CyberScout, a leading provider of identity theft management services, include:
The IRS offers additional information about preventing tax-related identity theft in its Taxpayer Guide to Identity Theft.
— Maria Cordeiro is an Assistant Vice President and Client Services Manager for Chubb Personal Risk Services.
Speak to an independent agent about your insurance needs.