Avoiding Income Tax Fraud

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Howard Schwartz, of the Connecticut Better Business Bureau, provides some tips on how to avoid income tax fraud.

Below a press release from the Connecticut Better Business Bureau on the topic. For more information, visit www.ct.bbb.org.

“Better Business Bureau advises consumers to file their 2013 income tax returns as soon as possible, to avoid losing a refund to an identity thief. With all of the personal information contained in tax documents, criminals will try every trick in the book to obtain these documents in order to get Social Security numbers and intercept refunds.

The Internal Revenue Service (IRS) reports a 66 percent increase in its investigations into this kind of crime in 2013 over the previous year.

Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or IRS records show they received wages from an employer they don’t know. The criminals accomplish this by stealing personal information or applying for employment in the victim’s name and claiming a refund. Once their work is done, a legitimate refund request will be denied. Undoing the damage and receiving the refund can take months.

Personal information can be obtained by going through trash, stealing documents from mailboxes and sending emails that look like they originate from the IRS. In some cases, dishonest tax preparers misuse clients’ information or sell it to identity thieves.

To lessen the chance you’ll be a victim:

  • File your tax return early in the tax season, before identity thieves do.
  • Use only a secure Internet connection if you file electronically. Don’t use publicly available Wi-Fi hotspots at places like coffee shops or hotel lobbies.
  • Shred copies of your tax return, drafts or calculation sheets you no longer need.
  • If you intend to mail your tax return, put it in a USPS mailbox or drop it off at the post office, to prevent it from being intercepted from your roadside mailbox.
  • Respond to all mail from the IRS as soon as possible.
  • Remember that the IRS won’t contact you by email, text or social media. If the IRS needs information, it will contact you by mail.
  • Don’t leave W-2’s in unsecure locations like your office or car.
  • Get recommendations and research a tax preparer thoroughly at bbb.org before you hand over personal information.
  • Don’t give out your Social Security or Medicare number unless necessary. Ask why it’s needed, how it’s going to be used and how it will be stored.
  • Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.

More information about tax identity theft is available from the FTC at ftc.gov/idtheft and the IRS at irs.gov/uac/Identity-Protection.

If you suspect you are the victim of tax identity theft, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.”

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