Identity theft complaints rose to more than 11 million last year, and tax-related scams have increased by over 700% since 2008. Two million fraudulent tax returns were filed in 2011 alone, at a cost of two billion dollars. Common scams include:
Double filing: If you receive a notification from the IRS informing you that multiple tax returns have been filed in your name, you should respond immediately to begin working through the restoration process.
Employment scams: Receiving wages from an unknown employer is often the first tipoff that you have been victimized by an employment scam. Avoid this issue by protecting your Social Security number. You can also make your Social Security number less attractive to thieves with a credit freeze.
Phishing scams: If you receive an unsolicited email or text message that appears to have been sent by the IRS, hit delete without clicking any links within the message.
Scam tax preparers: These con artists set up shop for just long enough to collect victimsâ€™ personal information in order direct refunds to themselves. Stick to doing business with accountants you know, like, and trust.
You should also take the following additional precautions to protect yourself from these and other tax-related scams:
Protect your data: Thoroughly secure any and all sensitive documents from the moment they arrive in your mailbox. File cabinets must have locks, and important documents should be stored in a fire resistant safe.
Shred non-essential paperwork: Use a crosscut shredder before disposing of any documents continuing sensitive data.
Go paperless: Opt out of paper statements in favor of having electronic statements sent to your email.
File early: Filing your sooner rather than later is a simple way to thwart any potential attempts to file on your behalf and fraudulently collect your refund.
Go to the post office: If you submit your taxes through the mail, do so by mailing them directly from your local post office, rather than leaving them in a mailbox.
Protect your PC: Before filing online, be sure that your computerâ€™s operating system is up-to-date with the latest critical security patches. You should also use comprehensive security software that includes antivirus, anti-spyware, anti-phishing, and anti-spam protection as well as a two-way firewall.