Eight Tips to Prevent Tax Fraud
It is tax time for businesses and individuals, and during this season, it is so important to be smart before, during and after tax season by protecting your confidential information and to take steps to prevent Tax Fraud.
According to the IRS, in the first five months of 2017, approximately 107,000 taxpayers were victims of tax identity theft.
Tax fraud is widespread because cybercriminals only need a name, date of birth, and Social Security number to file a fraudulent tax return.
Here are eight tips to help prevent Tax Fraud and Identity Theft before, during and after tax time:
1. Hide Social Security Number
Social Security numbers are a frequent target of many fraudsters and should be securely hidden under all circumstances. They are used in bogus tax returns and is a regular focus of consumer warnings from the IRS. To help prevent identity theft, leave your Social Security card at home in a safe place and don’t carry any document that has your SSN on it.
2. Use Smart Passwords
Choose a strong, unique password for each site you use, such as online banking, brokerage accounts, PayPal, and other sites where you provide your personal information. Don’t have your computer automatically save passwords, especially on work computers, and change passwords regularly.
3. Keep all financial and personal information private
Thieves also try to get your financial information in other ways, other than through online sites. Beware of providing personal information to someone over the phone or through the mail. Unless you have initiated the contact or you are sure you know the person you’re talking to, it’s better just to say no.
4. Beware of Phishing
Phishing is the number one scam on the IRS’s 2018 Dirty Dozen List of Tax Scams. Phishing is a term for online scams that use official-looking emails that seem to come from the IRS or your bank. At tax time, unsolicited phishing emails, texts, and social media posts will arrive from ‘fake’ IRS agents requesting personal and financial information.
Since the government started tracking fake IRS telephone scams 5 years ago, 12,400 victims have paid more than $61.6 million dollars to scammers.
Always be suspicious of this kind of email. The IRS never requests financial or personal information in email communications, and neither does legitimate companies. You can report scammers’ caller ID info and callback numbers to the IRS by sending an email to firstname.lastname@example.org
5. Know the IRS Methods
According to IRS Identity Theft Central, they will NEVER do the following:
Contact you by phone, email or in-person visit without first sending notice via postal mail. In addition, no legitimate phone communications or emails from any government agency will instruct you to enter your full Social Security number via phone keypad or submit it via an online form.
Do not use your phone’s “call back” option to return a message from Social Security, even if it appears to come from this phone number. If you receive a call purporting to be from the Social Security Administration, you can call the agency’s official phone number (800-772-1213) to verify its legitimacy
6. Keep on top of the latest scams
Familiarize yourself with the latest scams to avoid many bogus IRS shakedowns. With so many data breaches making headlines, it’s very important to safeguard your information and check for fraud.
Things you can do to help prevent becoming another victim include:
- If you receive notice of a data breach or computer hack, find out what kind of data was taken
- Visit IdentityTheft.gov for steps you should take right away to protect yourself and your financial accounts.
- Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:
o Equifax.com – 1-800-525-6285
o Experian.com – 1-888-397-3742
o TransUnion.com – 1-800-680-7289
7. Set up a Storage System
Set up a secure storage system for paper documents. A fireproof safe box is recommended. In addition, convert your paper documents to a digital format such as from a document scanning company. Save electronic copies to a backup storage device or cloud storage.
8. Use Secure Shredding
Never put confidential documents intact into the garbage or recycling bin. Information thieves can easily find your personal information in the trash, even if paper has been ripped up manually, they can be pieced together. When no longer needed, properly destroy paper documents by using a reputable shredding company. In addition, old hard drives should also be professionally and 100% destroyed.
Keep your confidential information secure before, during and after tax season protect your confidential information. If have any other questions on how to protect your tax documents contact Shark Shredding at (708) 388-0011 or email@example.com.