InvoiceBerry Blog

Our thoughts & tips on small businesses, freelancers and sole traders

6 Tips to Protect Yourself from Tax Return Fraud

Written by on October 21, 2019

Suppose you are looking forward to some payment of your tax return, and the time for it has come. Though, you receive a note from the IRS which informs you that your tax return has already been withdrawn, or that more than one request for your cost has been filed. It means that some criminals have done it for you, and you will have to spend a lot of extra time and effort to prove that it was a fraud. 

You may be sure that all your accounts are completely protected. Do not get deceived. Fraudsters are everywhere, and thousands of people face this problem. Who told you that the same thing cannot happen to you?

Therefore, instead of referring to some reputable tax attorney whom you can find online, for example, from Tax Defense Partners, try to prevent such trouble and protect your documents and files against this fraud.

What Tax Refund Fraud Actually Means

It is a type of identity theft meant to use the stolen information (first of all, such as Social Security Number) to get your tax return money by means of filing the forged tax return request.

Criminals can do this in different ways. The most popular ones among them are fake phone calls and phishing emails. What way they do this? There are some the most widespread ones:

  • Sending you the email from the Internal Revenue Service (IRS) with some demand to pay your tax, or with the warrant for your arrest.
  • Pretending to be a potential employer, they send you the request for your personal information from the fake HR or payroll team.
  • If you are a business owner of the company, the email is sent on behalf of a potential employee and directed to an HR or payroll team, and it is just a tax scam.
  • Pretending to be your fake CPA or relative requesting your sensitive information about tax documents by email.
  • Phone calls from ‘the IRS’ demanding some tax information because you are likely to have some tax problems.
  • Stealing letters from your open mailboxes to catch some tax information of yours.

The first thing for you to remember to be on the safe side is: never provide any personal information by emails or phone calls unless you know who is emailing or calling. And never open any email or its attachments if it looks just a bit suspicious.

How to Avoid Tax Return Fraud

There are some effective ways of how protect yourself from tax return fraud. Here are some tips that can help you to feel secure.

Keep Your Social Security Number (SSN) Safe

Do not carry your Social Security card or any other documents containing your SSN everywhere with you. Your SSN is always used by IRS to identify you as a tax payer. So, it is most often the main target for fraudsters. Getting it, they can file a fraudulent tax return, and they do it quite early in the season before you are ready to do it yourself. 

Keep your SSN private even if you are asked for it. Give it to other people only if you are absolutely sure about the necessity of it. If any business or service provider asks for it, avoid providing your SSN, especially if the request has been made by email. You also need to check your earnings statement in the Social Security Administration just once a year.

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Provide Your Computer Security and Protection

Even if you are not tech-savvy, you can do your best to protect your computer against hackers. The start is a strong and unique password for your online banking and / or brokerage accounts. Change this password on the regular basis, just once in two months. Experts say that changing a password like this is equally as important as changing your toothbrush. Never let your computer or any financial site to save your password automatically, especially if you are using your computer for work.

Update your computer software regularly. That will allow protection against viruses and spam. Always use a firewall, anti-virus, and anti-spam programs. Even if you recycle your old computer, make sure that the hard drive has been cleaned or professionally destroyed.

Maintain Privacy of Your Financial Information 

Even if thieves cannot get your financial information immediately from your computer, they may try to do it in some other way. Never provide such information by email or by phone. If it was not you who have initiated the call or if you do not know who exactly you are talking to, always say no to such a request.

Fraudsters may also want to have a look at your old tax documents, checks or bank statements containing your SSN or any other sensitive information. If you are disposing of such documentary, always shed the papers.

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Be Aware of Phishing

To feel safe and protected, you need to know what phishing is. It is a term which defines all the fake email that looks quite official and sent, for example, from the IRS or bank. It serves well to those thieves who are looking for your SSN , passwords or numbers of accounts. If you open such an email or its attachment, you can never feel secured any more. 

Remember that the official authorities never request any kind of personal information by email communication. Moreover, the IRS will never call you to inform that you owe some taxes. They will always send you an official letter instead.

Avoid Solicitation of a Credit Card

Being financially established and a client of one certain bank, be not interested in any other card solicitation. Thieves may be interested in getting a credit card in your name to receive your SSN or other personal information. 

All junk offers of a card should be disposed of by shredding, getting off the list offering pre-approved cards, or reducing this junk mail by any available way.

Keep Your Mailbox Locked

Someone may be quite interested in what kind of mail you are receiving. Many official letters may contain the sensitive financial information. So, by locking your mailbox, you protect yourself from identity theft.

If You Have Become a Victim

Therefore, what to do if you have already become a victim of identity theft and /or tax return fraud? There are some ways to react immediately, and they may save you from more severe problems.

If you are just suspecting data breaches or financial information theft, you may take the following steps:

  • If you receive a notice of data breach, try to find out what kind of information is effected.
  • If the breach has happened in the company provide some service to you, keep in touch with them to know what steps they are taking to protect your sensitive information.
  • The immediate contact with one of the three biggest credit bureaus will help you to place a ‘fraud alert’ as soon as possible, so that your credit record could be protected.

If you are sure that some information has been taken, or if you have already become a victim of identity theft because you have received a notice from the IRS that more than one filing of tax return was received, contact the IRS Identity Protection Specialized Unit, and then complete an Identity Theft Affidavit due to Form 14309.

In addition, the IRS may ask you to provide the proofs of all your suspicious conversations and correspondence. You may also opt for filling in a report to the local police office. Also, remember to put a credit freeze on the credit file.

Even if you have become a victim of the tax refund fraud already, anyway, file your return and pay any taxes you are required on time.

In conclusion, it is worth mentioning that a lot of cybercriminals are seeking for the ways to make money from the stolen identities. The good news is that the number of such thefts is decreasing due to the IRS updated policies. These renovations concern tax return processing and ways of communication with tax payers. 

The bad news, however, is that the refund fraud still occurs rather often, and tax payers experience delaying the disbursement of refunds for long periods. That is why your personal data security is so important. The tips from this article are meant to help you prevent the problem and cope with it.

James Riddle is a freelance writer passionate about new technologies, marketing trends and branding strategies. He is always seeking to discover new ways for personal and professional growth and is convinced that it’s always important to broaden horizons. That’s why James develops and improves his skills throughout the writing process to help and inspire people.

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