You have filed your tax returns and feel like you can now relax for another year. Not so fast.
Tax identity theft happens when someone files a fake tax return using your personal information – like your Social Security number (SSN) – to claim a fraudulent refund. It can also occur when someone uses your SSN to get a job or claims your child as a dependent on a phony return.
Although tax ID theft has decreased over the past few years – with the number of tax-related identity theft victims falling nearly 65 percent between 2015 and 2017 – the IRS still estimated that $12.2 billion in fraudulent refunds were attempted in 2016.
And with an expected $300 billion to be refunded to taxpayers this year, you can expect that identity thieves will be jostling for their piece of the pie.
To protect yourself, know the lengths fraudsters will go to take your personal information and the steps you can take to combat tax identity theft.
1. Dumpster diving. Treat your trash carefully. Tax identity thieves will go through your garbage in an attempt to search for personal information. Be sure to shred or destroy tax return, drafts or calculation sheets you no longer need, as well as any other documents containing sensitive information.
2. Phone scams. Unfortunately, identity thieves will put on an Oscar-worthy performance to trick you into handing over your tax refund. Scammers will pose as the IRS to solicit your personal information via phone, going as far as to altering the caller I.D. to make it look like a legitimate phone call from the agency, as well as using fake names and IRS identification badge numbers.
It’s important to know that the IRS will never initiate contact with you over the phone – or by text message or social media, for that matter. If the IRS needs to contact you, it will do so first by mail. If you have any doubts about who is contacting you, you can call the IRS directly.
3. Going phishing. Don’t expect any emails from the IRS either. Phishing scams have been around since the dawn of email – just think of that Nigerian Prince who asked you for a few dollars back in the day – but, over time, they’ve become increasingly more popular and convincing.
In fact, during the 2016 tax filing season, the IRS issued a consumer alert for email schemes after seeing a 400 percent increase in phishing and malware incidents. Fraudsters send emails representing themselves with fake credentials or phony email addresses in an attempt to trick unsuspecting victims into revealing personal and financial information.
Thousands of people have lost millions of dollars and their personal information to tax scams.
For those that may have already fallen victim to tax identity fraud and had their personal information compromised, don’t panic. You can contact the IRS Identity Protection Specialized Unit at 800-908-4490, or visit IdentityTheft.gov, the federal government’s one-stop resource to help you report and recover from identity theft.
Curtis Loftis is the South Carolina state treasurer.