During last year’s tax season, it seemed unlikely that we would still be dealing with the COVID-19 pandemic when filing again this year. However, as the world continues to react to the virus, scammers are adapting their techniques to steal your money. With the increase in the number of transactions with the IRS this year (including child tax credit pre-payments, economic stimulus payments, and federal unemployment), the door has also become more widely open to thieves attempting to steal your tax benefits and your identity.
This month, we’re focusing on your top questions about tax identity theft, and what you can do to protect yourself.
What is tax identity theft and how does it work?
According to the IRS, tax-related identity theft occurs when someone uses your stolen personal information, including your Social Security number, to file a tax return claiming a fraudulent refund. A successful scammer can create an online return using just your Social Security number, even if they don’t spell your name right. Once the fraudulent account is established, they can not only use it to file taxes on your behalf and receive your refund, but also to receive future relief payments from the federal government. The criminals are adept at using accounts that funnel money into pre-paid debit cards so that it is untraceable and unrecoverable.
Who is at risk?
In short, everyone is at risk of falling victim to tax identity theft. Thousands of Americans are impacted each year. As with other forms of identity fraud, children and the elderly are most commonly targeted, but with the increase in tele-working during the last year, more people also found themselves falling victim to online-based fraud. Once employees are outside of the firewalls that are typically found in corporate environments, hackers are more easily able to gain access to devices and the information stored within them.
What do you need to watch out for?
Your first sign of tax identity theft this season will usually be a letter from the IRS after filing your return, informing you that one has already been filed using your Social Security number. Year-round, expected payments that are not received are a sign to watch for. Also be mindful of any tax reporting documents from employers you never worked with. Rather than ignoring them, follow up to ensure someone else hasn’t stolen your identity and taken a job using your information. Here is a quick list of suspicious activity involving the IRS that may be identity theft, from the Taxpayer Guide to Identity Theft.
Be alert to possible tax-related identity theft if:
What should you do to protect yourself?
Now that you are armed with information about what tax identity theft is and how to recognize it, there are several actions you can take to protect yourself from becoming a victim.
Remember, the IRS will never initiate contact with taxpayers by email, text or social media to request personal or financial information including your taxpayer Identity Protection PIN, nor will they ever threaten with lawsuits or arrest.
While you’re now armed with the information to protect yourself in the future, remember that as a Premium Checking account holder, you have access to our Identity Theft Recovery Advocates. If you feel that you or a dependent have fallen victim to identity fraud of any kind reach out to our trained professionals for support in regaining what you have lost.