Tax refund fraud is rising, but it’s avoidable. The IRS is helping Americans not have their hard-earned tax refunds stolen by scammers.
The IRS is attempting to prevent tax fraud by adding more security layers to a tax filer’s online account, especially with online tax preparing companies like Turbo Tax. More complicated passwords and identity protection PIN’s have also been implemented to strengthen the online accounts of taxpayers.
Taxpayers can also take some proactive steps to prevent tax fraud and identity theft. From Krebs on Security:
-File before the fraudsters do it for you – Your primary defense against becoming the next victim is to file your taxes at the state and federal level as quickly as possible after the 2016 Tax Filing Season begins — which is usually the second or third week in January. Remember, it doesn’t matter whether or not the IRS owes you money: Thieves can still try to impersonate you and claim that they do, leaving you to sort out the mess with the IRS later.
-Get on a schedule to request a free copy of your credit report. By law, consumers are entitled to a free copy of their report from each of the major bureaus once a year. Put it on your calendar to request a copy of your file every three to four months, each time from a different credit bureau. Dispute any unauthorized or suspicious activity. This is where credit monitoring services are useful: Part of their service is to help you sort this out with the credit bureaus, so if you’re signed up for credit monitoring make them do the hard work for you.
–Monitor, then freeze. Take advantage of any free credit monitoring available to you, and then freeze your credit file with the four major bureaus.
-File form 14039 and request an IP PIN from the government. This form requires consumers to state they believe they’re likely to be victims of identity fraud. Even if thieves haven’t tried to file your taxes for you yet, virtually all Americans have been touched by incidents that could lead to ID theft — even if we just look at breaches announced in the past year alone.
The IRS says it prevented $24 billion in tax refund theft in 2013.
Photo by 401kcalculator.org via Flickr CC License
