Tax identity theft remains one of the top scams listed on the IRS “Dirty Dozen” list and, although safeguards put in place by the agency in 2016 did reduce the number of fraudulent tax returns processed, large-scale data breaches that exposed hundreds of millions of American’s personal and financial information have drastically increased the risk that identity theft and tax fraud will occur in the future. Tax return preparer fraud also remains a concern as dishonest preparers often surface this time of year to target unsuspecting victims and use their personal information to conduct tax refund fraud and identity theft.
Here are the best ways to avoid tax identity theft:
- File your tax return as early as possible.
- Use a secure internet connection to file electronically, or mail your tax return directly at the post office.
- Never respond to emails, texts, or social media communications claiming to be from the IRS. The IRS will only contact you by mail. Report any suspicious or unsolicited emails claiming to be sent from the IRS to firstname.lastname@example.org.
- Never provide personal information to anyone purporting to be an IRS representative who contacts you via an unsolicited telephone call. Instead record the caller's name, badge number and a call back number. Hang up and then contact the IRS at 1-800-366-4484 to determine if the caller is an IRS employee with a legitimate need to contact you. Also, remember that the IRS will never call demanding immediate payment of taxes owed or a specific method of payment, such as a prepaid debit card, gift card, or wire transfer.
- Monitor your credit report to verify there is no unauthorized activity.
- Enroll in the IRS Identity Protection Pin (IP PIN) program to obtain a 6-digit pin.
Organization payroll and human resources departments must remain vigilant in safeguarding employee tax records. Cybercriminals target HR and payroll departments using various social engineering schemes designed to trick them into believing upper management has made an urgent request for employee W-2 forms. Because these schemes are often very sophisticated and convincing, many targets act on the request quickly without taking additional steps to verify the source. Payroll and HR officials should be wary of any requests for employee W-2 forms or Social Security numbers and security procedures should be implemented that require the written approval of multiple people before a request for personal information is fulfilled. The following are additional IRS tips for protecting yourself against potential tax identity theft:
- IR-2017-193: Online Security - Seven Steps for Safety
- IR-2017-194: Don’t Take the Bait; Avoid Phishing Emails by Data Thieves
- IR-2017-196: Victims of Data Breaches Should Consider These Steps
- IR-2017-197: Employers, Payroll Officials, Avoid the W-2 Email Scam
- IR-2017-198: Small Businesses: Be Alert to Identity Theft
- IR-2017-211: Get Ready for Taxes: Choosing a Tax Return Preparer?
- IR-2017-203: IRS Warns Taxpayers, Tax Pros of New Email Scam Targeting Hotmail Users