Tax Related Identity Theft Is On The Rise

Tips for Preventing Tax Fraud And What to do if it Happens to You

It is tax time.  Fraudulent acts and scams are on the rise so taxpayers need to be extra vigilant when filing their taxes.  Tax-related identity theft happens when a criminal uses your personal identification information (PII) to file a tax return in your name.  Scammers have also attempted to access bank accounts in order to steal stimulus checks or tax refunds.  Unfortunately, most people do not realize they are victims until the tax fraud has already taken place.  They file their taxes and the IRS rejects them, because someone with that name and Social Security number has already filed.  Someone has already walked away with your refund check.

Be Proactive!  Protect yourself and your money!

There is no way to guarantee that you won’t be a victim to tax fraud, however, there are proactive steps you can take to protect yourself.  The first step is to file your taxes as early as possible. File your return as soon as you have all of the necessary information.   If you have already filed a return, it will be impossible for anyone else to file a fraudulent one or claim a fraudulent refund.

Follow privacy guidelines whenever filing or using your PII.  It is crucial to use security software, encrypt sensitive information, use strong passwords, and use two factor authentication.   Strong and unique passwords are important.  Using a password manager is recommended.  Whenever multifactor authentication is offered, use it.  When providing personal and financial information on websites, look for the “https” address.

It is important to know that the IRS does not use email or text messages to request personal information from taxpayers. When the IRS needs to reach you, they will usually send a letter.  They will also never demand immediate payment.   Criminals may try to phish for your information and pose as an IRS official or tax preparer.  If you receive an urgent request to “act now”, don’t do it!  Never click on a link or download an attachment without verifying the source.  Instead, you should forward it to phishing@irs.gov.  Any IRS imposters should be reported to the US Treasury Inspector General to Tax Administration at tigta.gov.

Be sure to use a tax preparer that you trust and that has appropriate credentials.  A qualified preparer should have a Preparer Tax Identification Number, as well as professional credentials, such as a certified public accountant (CPA) license .  Consider vetting your accountant through the Better Business Bureau.  Verify you are trusting a credible accountant with your PII.

Monitoring your tax account is recommended.  You can log into the IRS website at any time to see if anyone has filed a report in your name.  Taxpayers can also get an identity protection pin.  This is a six digit number that prevents someone from filing a tax return using your SSN.  The only people that know this pin are you and the IRS.  The IRS offers a Taxpayer’s Guide to Identity Theft that provides helpful tips and information regarding how to use this helpful tool in protecting your identity.

Monitor your financial activity closely as well.  Review your account statements as soon as you receive them.  Notify your bank immediately if you notice errors or unauthorized activity.  If your account statement is ever late in arriving, contact your financial institution to figure out why.  Consider signing up for online banking.  This will allow you to monitor your account activity at any time.  Be sure to keep your online banking password private and change it periodically.  Many banks offer online bill paying options.  Paying your bills from a secure network may reduce the chance of identity theft from paper checks.

What Do You Do If You Are A Victim of Tax Fraud?

There are several steps to follow if you are a victim of identity theft.  First, contact your financial institution immediately to alert them of the situation.  The FTC (Federal Trade Commission) recommends filing a complaint at identitytheft.gov.  There are three major credit bureaus:  Equifax, TransUnion, and Experian.  Victims need to call them immediately to place a fraud alert on his or her credit records.  If your identity has been compromised, you must close any financial or credit accounts.

• Equifax.com 1-800-525-6285
• Experian.com 1-888-397-3742
• TransUnion.com 1-800-680-7289

The IRS recommends responding immediately to any IRS notice by calling the number they provide when you are notified.  Form 14039, Identity Theft Affidavit PDF should be completed as well.  You can fill out a fillable form at Internal Revenue Service | An official website of the United States government.

What Help is Available?

While it can be challenging for banks to keep up with the tactics of scammers, technology is on their side.  There are strong security measures in place to weed out potential fraud and protect customers accounts.  Financial institutions encourage account owners to opt into privacy protection options that have been put in place to protect them, such as two factor authentication.  

More and more people are using the internet each day and the threat of identity theft is rising worldwide.  Jarrettsville Federal knows security and privacy are very important to our customers.  Our online banking allows you to select a unique password of your choice.  All messages are encrypted, and “firewall” technology prevents others from gaining unauthorized access to our computer system.  For additional information on internet safety please see our Consumer Awareness Guide.

Jarrettsville Federal offers checking, savings and loan products that meet our customers’ needs, technology that brings us securely into the future, and community service that gives back to not only our customers, but the local area in general.  Contact us at 410 -692- 5151 or visit our website at https://www.jarrettsvillefederal.com/.