Tax season is right around the corner, and to help you get ready, Better Business Bureau is urging taxpayers to be proactive. In 2012 tax identity theft accounted for more than 43 percent of identity theft grievances in the FTC’s database. And with tax identity theft continuing to have an increasing share of identity theft complaints, it’s more important than ever for consumers to be protective of personal information.
Tax identity theft happens when someone files a phony tax return using your personal information — like your Social Security number — to get a tax refund from the IRS. It also can happen when someone uses your Social Security number to get a job or claims your child as a dependent on a tax return. Tax identity theft is the most common form of identity theft reported to the Federal Trade Commission. The IRS said tax identity theft is a top priority and it has hired new staff, explored new technologies, and adopted new procedures to fight it.
BBB advises taxpayers to take the following steps to keep from becoming victimized:
File your tax return as early in the tax season as is possible.
Use a secure internet connection if you file electronically, or mail your tax return directly from the post office.
Shred copies of your tax return, drafts, or calculation sheets you no longer need.
Respond to all mail from the IRS as soon as possible.
Remember hackers are able to spoof caller ID, so make sure you verify (by initiating a call to the IRS) that someone who contacts you actually works for the IRS if they make that claim.
Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail.
Don’t give out your Social Security number (SSN) unless necessary.
Research a tax preparer thoroughly before you hand over personal information. Go to bbb.org to check out the track record of your preparer.
Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.
If you become a victim: Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or IRS records show they received wages from an employer they don’t know. If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. It may also be a good idea to file an alert with each of the three credit reporting agencies.
More information about tax identity theft is available from the FTC and the IRS, and check out BBB’s Scam Stopper for the latest alerts.
Visit bbb.org to find businesses you can trust and tips on how to be a savvy consumer. To report a fraud or unscrupulous business practices, call the BBB Hotline: 903-581-8373.