Yet another potential problem after the Equifax date breach—thieves filing fraudulent tax returns. Among the data stolen in the Equifax hack were the Social Security numbers of up to 143 million people. Most of the protections offered centered around freezing credit and credit monitoring, but nothing much has been done to address potential fraudulent tax returns. A thief needs only your name and Social Security number to file a tax return and score a fraudulent refund. So what can you do to mitigate the risks?
1 File early. The wait for investment 1099’s and K-1’s may hold up filing, but you can still get organized, so you’re ready to go when you do receive those last forms. Make a list of forms you’ve received for past tax returns, so you’ll know what you still need.
2 Keep an eye on your tax account to see if someone else files a return in your name, so you can take action. You can see details online through the IRS; signing up is cumbersome and requires a lot of personal information, but it could be worthwhile.
3 The IRS will notify you in a letter if someone tries to change your personal information; watch your mail.
Be careful online, and avoid any site that requests a lot of personal information.
If you do find you’ve been a victim of tax identity theft, take action immediately by filing a police report and a fraud report with the FTC Identity Theft Hotline (877-438-4338). You will also need to file a form 14039 with the IRS, and you may have to file your tax returns on paper.
Jackie Cooper-Galey, CPA, is a Tax Manager with the Kemper CPA Group, LLP in Evansville.
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