How You Can Prevent Tax Identity Theft

Identity theft is a growing concern for many Americans and it can be incredibly difficult to recover from its effects. While identity theft can happen at any time, tax season often sees an increase in cases in the form of tax identity theft. Since your tax forms require your sensitive information including your social security number (SSN) and bank account information, thieves often take advantage of tax season by trying to steal your information.

These thieves also know that many people aren’t aware of how to properly file their taxes, which makes them easier targets. To combat the rise in tax-related identity theft cases, PROSHRED® Houston, a mobile paper shredding service, is here to teach you everything you should know about tax identity theft, how it happens, and some convenient ways you can avoid it.

What is Tax Identity Theft?

In its simplest form, tax identity theft is when your personal information is stolen and used to file a fraudulent tax return in your name. This can happen in a variety of ways, but most often it happens when thieves gain access to your social security number. With your SSN, these thieves can also apply for credit cards or loans in your name, open new bank accounts, and even file taxes using your information.

While it may seem like a victim of tax identity theft would know right away if taxes were filed under their name, that’s often not the case. In fact, many people don’t realize that they’ve been victimized until they go to file their own taxes and discover that someone has already filed under their name. If this happens to you, it’s important to act quickly, since quickly reporting fraud will make it easier to resolve the issue.

How Does Tax Identity Theft Occur?

There are a few different ways that tax identity theft can occur, but one of the most common methods is through data breaches. When companies of any size experience data breaches, their customers’ and employees’ personal information, such as SSNs and addresses, is often leaked. This information can end up on the black market where it’s bought and sold by criminals. These thieves can then use this leaked information to file taxes in your name or commit other forms of fraud.

Tax-related identity theft can also happen through phishing scams. These scams are emails, text messages, or phone calls that appear to be from legitimate sources, like the IRS, but they are actually from criminals trying to steal your information. These scammers may try to convince you to visit a link that leads to a fake website that prompts you to enter your sensitive information.

They may also try tricking you into sharing your personal information through an email, text message, or phone call. If you receive any type of communication that appears suspicious or asks for your sensitive information, don’t click any links or share any information unless you can verify the sender.

The Consequences of Tax Identity Theft

For victims of tax identity theft, it can have several serious consequences. The most noticeable problem occurs when someone uses your SSN to file a tax return, which means you may not be able to file your own return. This can cause major delays in getting your refund, and you may even owe money to the IRS without realizing it. In addition, tax identity theft can lead to wage garnishment, loss of government benefits, and even jail time if the IRS believes that you filed a fraudulent tax return.

Reduce Your Risk of Identity Theft

While tax identity theft is a serious problem, there are several steps you can take to reduce your risk:

• File your taxes as early as possible. The earlier you file, the less time thieves have to file a return in your name.
• Don’t carry your SSN card or any documents that show your SSN. If these items are stolen, it becomes easier for thieves to commit fraud.
• Be aware of phishing scams and only give your personal information to trusted sources.
• Check your credit report regularly for any suspicious activity.
• Shred any documents that contain your personal information using a trusted residential paper shredding company.

If you believe that you’re a victim of tax identity theft, it’s important to act quickly. Start by filing a police report, then contact the IRS to make them aware of your issue. It may also help to reach out to a state tax agency since they may provide you with additional advice. Taking quick action can resolve the issue faster and prevent further damage.

Protect Your Identity During Tax Season with PROSHRED®

At PROSHRED® Houston, we want to protect you from identity theft during tax season. To accomplish that, we provide scheduled shredding services and a hard drive shredding service, so you can properly dispose of your physical and digital information before thieves have a chance to steal it. For more information on our services or to receive a free quote, contact us today!