With such a large amount of personal data being exchanged around tax season, this time of year is especially profitable for them. How do you keep yourself safe?

1. Be aware of how the IRS will contact you
2. Be aware of how the IRS will NOT contact you (but the fraudsters will)
3. What the IRS will never do
4. Never use a “ghost tax preparer” to file your taxes

In the second installment of the series, I will explore clues your information may have been compromised – and what to do if your personal data has fallen into the wrong hands.

Signs you are a victim of tax-related identity theft

Unfortunately, filing a tax return on someone’s behalf is not difficult, especially if they have gained access to your social security number. Here are signs someone has falsely filed on your behalf:

• You might receive a tax refund you did not request.
• In this con, the scammer first gets ahold of your social security number and bank account information. They use that information to file a fake tax refund in your name and have that refund deposited into your bank account. They’re giving you free money – sounds crazy, right?
• Unfortunately, they will then turn the tables by contacting you via phone and pretending to be an IRS employee. Criminals will proceed by letting you know you were inadvertently issued a refund (the one part of the story that is true) and then ask – or more likely demand – this mistaken refund be returned immediately. You may be asked to wire the money or even purchase gift cards in the amount of the refund you were issued and provide the redemption numbers over the phone. If the scammer is successful in getting you to send back the bogus refund, you will also owe the IRS the refund amount the fraudster requested on the fake return.
• Remember – if you are ever mistakenly given a refund, the real IRS will eventually contact you by postal mail to recover the false refund, which you’ll then need to send back. Prior to doing so, you’ll want to call the IRS by looking up their number.
• Your tax return gets rejected by the IRS. This could indicate someone has fraudulently filed a fake return on your behalf using your social security number.
• You receive a notice from the IRS that says you made more than you claimed and lists employers you have never actually worked for. Another sign someone might be using your identity is if you receive a W-2 or 1099 for a company you’ve never worked at.
• You properly claim your children as dependents, but your return gets rejected. This indicates a strong chance your children are the victim of identity theft and someone else is either claiming them as dependents or filing on their behalf as if they were adults.

What to do if tax-related identity theft or fraud is attempted or executed against you

First, don’t panic. There are many resources available to help you resolve the problem and prevent future deception.

• If you are victim of a tax-related crime, file a police report. Doing so will create an official record of the offense and provide you with documentation as you take other steps.
• If a fraudulent tax filing was successful using your identity, notify your CPA and request they provide IRS Form 14039 (Identity Theft Affidavit). The IRS will verify you are the actual taxpayer, clear the fraudulent return from your account and generate an Identity Protection PIN each year going forward to use when filing your tax return.
• You can report any tax-related crimes on the web site for the Treasury Inspector General for Tax Administration.
• The Federal Trade Commission’s (FTC) website will provide you with a step-by-step recovery plan if you are victim of identity theft (tax-related or otherwise).
• Fake emails or text messages that claim to be from the IRS can be forwarded to phishing@irs.gov. It’s important that you do not open the attachments or click on any links in those emails.
• For fake phone calls from the IRS, contact the FTC via the Complaint Assistant. Add “IRS Telephone Scam” in the notes.
• Report Social Security Administration phone impostor scams using the form on the Social Security Administration’s website.

Finally, if you believe someone has committed some sort of identity theft against you, tax-related or not, please contact your Buckingham Strategic Wealth advisory team. We can determine if any alerts need to be placed on your accounts and discuss and recommend next steps.

With a little diligence, you can stop scammers in their tracks. If something seems wrong, it probably is. Happy tax filing and stay (cyber) safe!

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