Beware tax ID thieves

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation! 

By BankRate

We made it through the first week of tax filing season 2015. Unfortunately, during those days some folks’ tax information likely was stolen and used to file fraudulent tax returns.

Tax identity theft is a major and growing problem for taxpayers and the Internal Revenue Service alike.© John T Takai/Shutterstock.com

Taxpayers suffer when they go to file their returns and learn that a crook already has used their Social Security number to claim a fraudulent refund. They must wait for the IRS to determine that they are the legitimate taxpayers before they can get their rightful refund.

On the IRS side, the tax agency must implement more filing system changes to try to catch the crooks. When the tax ID theft does occur, it must spend extra time with the victims to help them get the refunds they, not the criminals, are due.

The IRS has focused more resources in recent years on clearing up tax identity theft cases, and resolution times are improving. But any delay is incredibly frustrating for folks expecting a tax refund.

“Scams can be sophisticated and take many forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues,” says IRS Commissioner John Koskinen.

Take steps to stop ID thieves

The commissioner is right. The best way to combat tax identity theft is to avoid becoming a victim in the first place.

With the growth of telephone and email phishing scams, don’t give your personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

Additionally, to protect yourself from tax identity theft, the IRS recommends that you:

  • Don’t carry your Social Security card or any documents that include your Social Security number or Individual Taxpayer Identification Number, or ITIN.
  • Don’t give a business your Social Security number just because they ask. Give it only when required.
  • Check your credit report and Social Security Administration earnings statement annually.
  • Secure personal information in your home, both physically and digitally. This includes adding firewalls and anti-spam and anti-virus software to your personal computer. Update computer security patches and periodically change passwords for your Internet accounts.

Resolving tax ID theft

Despite individual taxpayer efforts, tax identity thieves still manage to get their hands on personal data and use it to file fake returns. When that happens, the IRS issues identity protection personal identification numbers, or IP PINs, to the real filers.

Each IP PIN is a unique, six-digit number that is assigned annually to identity theft victims whose cases are resolved so they can use the PIN to file their federal tax return. To date, the IRS has issued approximately 1.5 million IP PINs.

This year, the IRS is continuing its IP PIN pilot program that allows taxpayers who filed tax returns last year from Florida, Georgia or the District of Columbia to opt in to the IP PIN program.

The IRS also is offering approximately 1.7 million more taxpayers to opt in to the IP PIN program. In these optional IP PIN cases, the IRS has identified indications of identity theft on the taxpayers’ accounts.

Such efforts help, but it’s better for everyone except the crooks if you don’t fall prey to tax ID thieves. So take extra care this filing season and protect your tax data and your refund.

Herman and Company CPA’s proudly serves Bedford Hills NY, Chappaqua NY, Harrison NY, Scarsdale NY, White Plains NY, Mt. Kisco NY, Pound Ridge NY, Greenwich CT and beyond.

 

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Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.