How to Guard Against Tax-Related Identity Theft

by Expert Contributor Mike Brady, MBA, of LPL Financial

Now that tax season is upon us, it’s as important as ever to guard against scammers stealing your identity. Below are some ideas and steps to keep you safe!

Tax-related identity theft occurs when a thief uses your Social Security number to file a tax return and claim a fraudulent tax refund. In 2017 alone, there were 597,000 confirmed identity theft tax returns. (Source: The Internal Revenue Service, IR-2018-21, February 8, 2018.)

The IRS has become increasingly diligent in efforts to thwart identity theft with their program of prevention, detection, and victim assistance called “Taxes. Security. Together.” It’s designed to build awareness among taxpayers about the need to protect personal data when conducting business online and in the real world.

By remaining vigilant and following these commonsense guidelines, you can support the IRS in keeping your personal information safe.

• Protect your information. Keep your Social Security card and any other documents that show your Social Security number in a safe place.

• Monitor your email. Be on the lookout for phishing scams, particularly those that appear to come from a trusted source such as a credit card company, bank, retailer, or even the IRS.

• Safeguard your computer. Make sure your computer is protected by using a firewall and a regularly updated antivirus program.

• Be alert for suspicious phone calls. The IRS will never call you to threaten a lawsuit or demand an immediate payment for past due taxes.

• Be careful when banking or shopping online. Only use websites that protect your financial information with encryption, especially when using your smartphone on a public wireless network.

• Google yourself. See what information is available about you online.

If you feel you’re the victim of tax-related identity theft — e.g., you can’t file your tax return because one was already filed using your Social Security number — there are several steps you should take.

• File your tax return the old-fashioned way: on paper and mailed in via the U.S. Postal Service.

• Print an IRS Form 14039 Identity Theft Affidavit from the IRS website and include it with your tax return.

• File a consumer complaint with the Federal Trade Commission (FTC).

• Contact one or all of the national credit reporting agencies (Experian, Transunion, Equifax) and request that a fraud alert be placed on your account.

If you’ve been confirmed as a tax-related identity theft victim, the IRS may issue you a special PIN to use when e-filing your taxes. You’ll receive a new PIN each year.

For more information, search for ‘identity theft’ on the IRS website (www.IRS.gov).

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Expert Contributor Mike Brady, MBA, of LPL Financial

Call today for more information or to schedule a consultation.

Mike Brady, MBA, of LPL Financial

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780 Parkway Blvd, Broomall, PA 19008

Michael.Brady@LPL.com