Protecting yourself from tax identity theft

Identity theft is a growing problem, especially with tax documents. Take steps to avoid having it happen to you.

Story: Evan Crosby

Millions of Americans fall victim to tax identity theft every year. Identify thieves can steal a taxpayer’s refund if they know the taxpayer’s personal information, such as Social Security number and employment data. Each year, the IRS reports nearly 1 million cases of tax identity theft that steals more than $6 billion from taxpayers expecting a refund. Luckily, you can protect yourself, and your refund, from tax identity theft.

Every tax filer has employment and tax records and is required to file a tax return, containing personal information. If that information falls into the hands of identity thieves, they can file a fraudulent return on your behalf and steal your refund. Therefore, safeguard all sensitive documents related to employment and taxes. Don’t just throw away papers that could be retrieved from your trash. Instead, shred all personal documents. Also, consider purchasing a home safe to store tax documents from earlier years, usually the last seven years. That way, if thieves break into your house, they may not get into your safe, keeping personal information safe.

Reduce your risk of tax identity theft by filing your return early giving identity thieves less time to file a fraudulent return. Don’t procrastinate when it comes to filing your return.

If you use a tax company to file your taxes, ask about security measures to protect personal information. Encourage them to take steps to prevent identity theft. If the company can’t offer security assurances, look for another tax service.

Many tax filers use computer programs or online services to file their taxes. However, entering personal data on a computer or online leaves you at risk of identity theft. You must have security software to protect your computer from viruses, malware, and hackers. If you use an online tax service, create a strong account password difficult to guess. Also, change it periodically to make it harder for identity thieves.

Finally, there is no way to guarantee protection from tax identity theft. Therefore, get account monitoring services to help protect you. Account monitoring services also help you restore your identity if it gets stolen. That way, you have a team of professionals to help fix the situation.

When identity thieves file a fraudulent tax return and steal your refund, getting it back is nearly impossible. Once the IRS sends a tax refund to someone, the money is gone. That means you get stuck trying to recover your refund from a criminal, usually is a futile effort.

Protect yourself from tax identity theft by safeguarding all sensitive documents. Don’t use tax preparation services unless they offer safeguards to protect data. If you file taxes using a computer, have comprehensive security software to protect your data from digital identity thieves. The IRS recommends taxpayers file returns early to avoid this. Sign up for account monitoring services that will restore your identity, should it get stolen.