The Internet is a valuable source of information on a wide variety of subjects. Unfortunately, it can also be a source of great frustration, because certain individuals would rather try and steal someone else’s identity, and thus their money, than work for it themselves. Although there are other ways that identity theft can be carried out, the Internet makes it easier for people to do it from a distance. With more and more people filing their tax returns via the Internet, the chances increase for someone to access your personal information. Following are a few identity theft tips for taxpayers.
What Is Identity Theft?
Identity theft happens when someone steals your personal information, such as your Social Security number, bank account number, or merely your name, and uses them for fraudulent purposes. This can range anywhere from charging a tank full of gas on your credit card to obtaining a line of credit for hundreds of thousands of dollar in your name. The damage to your credit rating and reputation can be extensive, and it could take years, or decades, to repair the damage. In some cases, the damage is so great that you’ll literally be forced to start from scratch, and rebuild your credit rating.
How Identity Theft Can Affect Your Tax Return
When it comes to identity theft in relation to your tax return; your personal information could be used by an unscrupulous person to obtain a refund. They would file a return using your SSN, and other personal information, and falsify the amounts in order to receive a hefty tax refund from the government. This theft may not come to light until you attempt to file your own return. It will raise a red flag in the IRS’s system because your SSN was used more than once. They will contact you about the discrepancy. At that point, you’ll have to contact the IRS and attempt to rectify the situation. It could take a long time to do so, because you will have to prove that the information provided to the IRS was fraudulent. It may be a good idea to hire a tax lawyer. or have a CPA on your side, if this should happen.
Take Action Immediately
If you receive such a letter from the IRS, don’t wait around wondering what happened. Take action immediately. Let the IRS know your tax return has been compromised, and you want to go on record as having reported it. You will be required to fill out IRS Form 14039. You can also receive additional information concerning what to do about suspected fraudulent use of your personal information by calling 1-800-908-4490, which is the number for the IRS Identity Protection Specialized Unit.
How to Protect Yourself
If you feel that you may be the victim of identity theft, you should report it immediately. Once you’ve contacted the police department to report the theft, and called the bank to place a hold on your accounts, you may want to contact the IRS, as well, at the toll free number listed above.
Safeguard Your Social Security Number
It is also possible to take preventative measures to avoid identity theft in the first place. Don’t carry your Social Security card with you, or any document that has the number on it. Instead, you should keep your card in a safe place–in your home, or in a safe deposit box at a bank. Don’t provide anyone with the number unless it’s absolutely necessary. If you apply for a job, or open a bank account, you will need to give them your number, but otherwise use caution when giving out personal information.
Monitor Your Credit Score
Another way to help protect your personal information from identity theft is to keep a close eye on your credit score. If you monitor your credit rating on a regular basis, you’ll be able to tell if there has been any activity that you didn’t initiate. For instance, if you check your credit score and find that someone attempted to secure a loan in your name, you’ll be able to contact the potential lender and let them know you suspect identity theft.
Because the Internet is wide open for identity thieves, you should take every precaution possible to ensure your safety while online. Maintain up-to-date anti-virus protection, and make sure you enable firewalls to protect your computer. Make sure you use random numbers and letters for passwords, because they’re harder to figure out, and change your passwords often.
Never, repeat; never give personal information to a voice on the telephone unless you’re absolutely sure who you’re talking to–like when you initiate the call–and only if it’s necessary to do so. Identity thieves are getting bolder, and more innovative, in the way they attempt to steal your personal information. Be on guard.
Guest post from Payton Price. Payton writes for TermLifeInsurance.org.