Since 2013, the efforts of the Criminal Investigative Division of the Internal Revenue Service has resulted in nearly 2000 criminal convictions for identity theft. The IRS, the states and the tax industry came together in 2015 to identify even more safeguards to protect your federal and state tax accounts from identity thieves. Unfortunately, tax returns are ripe with data that enable identity thieves to perpetrate their crimes. Some tips from the IRS include:
- Use security software to protect computers. This includes a firewall and anti-virus protection. If tax returns or sensitive data are stored on the computers, encrypt the files. Use strong passwords.
- Beware of phishing emails and phone scams. A common way for identity thieves to steal names and Social Security numbers, passwords, credit card numbers, bank account information is to simply ask for it. Clever criminals pose as trusted organizations that you recognize and send spam emails, calls or texts. Their email may ask you to update a bank account or tax software account and provide a link to a fake website that is designed solely to steal your log-on information. They may call posing as the IRS threatening you with jail or lawsuits unless you make an immediate payment. They may provide an attachment which, if you download, will infect your computer and enable the thief to access sensitive files or track your keystrokes.
- Protect personal information. Do not routinely carry your Social Security number. Properly dispose of old tax returns and other sensitive documents by shredding before trashing. Check your credit reports and Social Security Administration accounts at least annually to ensure no one is using your good credit or using your SSN for employment. Oversharing on social media also gives identity thieves even more personal details.
Electronic filing of tax returns has created an opportunity for identity thieves to obtain your confidential information. In response, for the 2016 filing season, there will be new standards for logging onto all tax software products such as minimum password requirements, new security questions, and standard lockout features. The software industry will provide more than 20 additional data elements from the tax return submission to the IRS and, in turn, to the states to help identify fraudulent returns.