Tax Scams and Identity Theft

By McClintock & Associates | November 15, 2016

By Kelly Brennan

The Internal Revenue Service has reported a significant surge in tax scams and fraudulent tax returns using taxpayer social security numbers and information. A problem that is effecting millions of Americans and costing taxpayers billions of dollars is the number of fraudulent tax returns being filed. Identity thieves are using stolen personal information to file fraudulent tax returns and collect refunds at an alarming rate.

Warning Signs of Tax Scam

Tax scammers are attempting to extract money and/or obtain private personal information through many means, but most notably through phone calls and email or “phishing” requests. There are many variations, so we recommend you check out the resources and alert page at the IRS website at (IRS Tax Scams/Consumer Alerts).

Warning Signs of Fraudulent Return

Taxpayers should also remain alert to possible identity theft and filing fraudulent tax returns for
refunds using your personal identification information. You may receive a notice in the mail from the IRS, or when filing your tax return electronically, you may discover and be notified that:

  • More than one tax return was filed for you;
  • Your attempt to submit your tax return electronically is rejected;
  • You owe additional tax, have a refund offset or have had collection actions taken against you for a year you did not file a tax return; or
  • Your state or federal benefits (e.g. social security benefits) were reduced or cancelled because the agency received information reporting an income change.

Tips to Avoid Being a Victim of Identity Theft

  • Do not carry your Social Security card or any documents that include your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Do not give a business your SSN or ITIN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report regularly. The IRS suggests you do this every 12 months.
  • Review your Social Security Administration earnings statement annually.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches, and changing passwords for Internet accounts.
  • Do not give personal information over the phone, through the mail, or over the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

The IRS does NOT initiate contact with taxpayers by email to request personal or financial information or by telephone. This includes any type of electronic communication such as text messages and social media websites. If you ever have any question or concern on any communication you receive that claims to be from the IRS or another tax agency, please contact your McClintock & Associates tax advisor.

Volume 3, Issue 4
Fall 2016

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