While the IRS and many states have been making a push towards electronic filing over the last several years, the number of reported cases of tax-related identify theft have been increasing rapidly. As recently as 2013, the IRS reportedly paid out $5.8 billion in fraudulent refunds.
Tax-Related Identity Theft
Tax related identity theft occurs when an identify thief uses a legitimate SSN to file a tax return claiming a fraudulent refund. The theft occurs prior to you having the chance to file an authentic return, and often you are unaware of the identify theft until you efile your return and receive notice that a return has already been filed using your SSN. While there are some basic steps you can take to protect your identity – don’t give anyone your SSN unless it’s absolutely necessary, protect your financial information, check your credit report regularly, protect your personal computers and smartphones – it is often outside of your control such as when a data breach occurs. If you must send tax documents via email, be sure they are password protected.
If You Become a Victim
If you do become the victim of tax-related identity theft, you should follow these steps:
- Immediately contact the IRS.
- Visit the Federal Trade Commission website at ftc.gov. The FTC provides an Identity Theft Affidavit on its website that can be used to document details about the crime.
- Once you complete an affidavit, take it to your local police department to file a report.
- Contact the credit reporting agencies to place a fraud alert on your account.
As for the good news, and for those who tend to procrastinate when it comes to filing your taxes, you’ll get even more time this year. The filing deadline is Monday, April 18th to file and pay any tax due because Emancipation Day holiday observed in Washington, DC, falls on Friday, April 15th.
How to Spend Your Refund $$
And for those of you expecting a refund this year, we can’t think of a better way to spend that money than to put it towards a home improvement project booked on HouseDox!