The IRS is again urging taxpayers to do their utmost to protect their identity from theft. The IRS recently updated their Identity Protection
page to reflect the latest advice. Especially during tax season, identity theft is an increasing problem that is proving difficult to combat.
According to the US Treasury Department, there were 1.2 million cases of tax identity theft in 2012. This is up from 48,000 back in 2008. The Department believes that this activity could cost the USA approximately $21 billion dollars over the next five years.
The identity theft problem is compounded by the increased use of electronic filing, which makes identity theft easier for criminals – all they need is your name and Tax ID number; they can make up the rest. In fact, the scheme is so enticing that it has drawn the attention of organized crime gangs. In fact, a recent Florida case had a mailman shot dead so that an identity theft gang could steal his master key.
It is impossible to completely protect yourself from identity theft, but there are steps you can take that will help:
- The IRS will not contact you electronically requesting personal or financial information – no emails, no texts, no tweets, etc. So, if you receive something like this, do not click on links or provide any information. In fact, don’t ever provide sensitive information unless you’re absolutely sure who you’re dealing with.
- It’s best not to carry around your Social Security Card or any documents containing your SSN. However, if you did and, for example, your wallet is stolen, you may be at risk. In this situation you should contact the IRS immediately and provide them with proof of your identity, together with a completed IRS Form 14039, Identity Theft Affidavit. Other ways in which you might notice you’re at risk are if the IRS reports multiple returns filed in your name, you notice reported income from an unknown employer, or you spot unusual activity on your credit report.
- Do your best to protect your personal information. This might include using strong passwords on sensitive documents, protecting your electronic systems through firewalls and anti-virus software, moving sensitive information to media (e.g. CDs) that can be locked in a safe, and so on.
The IRS has, and is, working on methods to combat identity theft, but it’s a tough battle. In the meantime, you should do whatever you can to ensure that you don’t end up as the next victim.