Feature Article
Mark Pribish
Be Alert to ID Theft When Filing Your 2009 Taxes
By Mark Pribish
Vice President and ID Theft Practice Leader

According to the February 2009 Federal Trade Commission (FTC) Consumer Sentinel Report (see http://www.ftc.gov/sentinel/ for more information), government documents/benefits fraud is now the second most common reported type of identity theft after credit card fraud. Fraudulent tax return-related identity theft, a subtype of government documents/benefits fraud, has increased nearly six percentage points since 2006!

So, with the Wednesday, April 15, 2009 deadline just a few weeks away here are some things you should know, as it relates to securing your good name when filing taxes:

  • You should always use a tax preparation service company which conducts background checks on its tax preparers.
  • You should always use a tax preparation service that has an up-to-date Information Security and Privacy Policy, as they are more likely to be responsible in safeguarding your tax return information.
  • You should ask your tax preparer about their professional experience, certification(s), continuing education, and privacy policy. There have been a number of cases in which identity theft has occurred after consumer information was breached through the negligence of tax preparers.
  • You should be aware that your tax return includes sensitive and personal information that identity thieves steal - including your name, address, and social security number, along with your dependant's names and social security numbers, bank account number and other financial account information.
  • You should be aware that the FTC continues to report identity theft as one of their top complaints - and yet state and federal government agencies continue to be a source of data breach events since they require social security numbers on state and federal documents, while continuing to exhibit lax information security.
  • You should be aware that your social security number and the social security numbers of your spouse and children are linked to your current and former employers, healthcare providers (doctor, dentist, hospital), health care insurance carriers (medical/dental insurance), insurance agents (home, auto, and life), educational institutions (students, parents and alumni), and financial institutions - and that NO ONE COMPANY can GUARANTEE you from ever becoming a victim of identity theft.
  • You should know that not every tax preparer can represent you before the IRS. Only a tax preparer that is an enrolled agent (EA) or certified public accountant (CPA) can represent you before the IRS relating to prepared taxes that they did not prepare.

Since identity thieves are targeting individuals and their tax returns, the Internal Revenue Service has opened a special office and identity theft unit to handle identity theft cases.

In an effort to help you determine whether or not you may be a target of tax return-related identity theft, the IRS has issued an alert titled IRS Tax Tip 2009-11 where they list the "Ten Things the IRS Wants You to Know About Identity Theft" (click here to view the complete list).

You can also call the IRS Identity Theft Hotline at 1-800-908-4490 or the Federal Trade Commission at 877-ID-THEFT with questions or for additional information.

That said, you need to complete a due diligence review of companies you do business with including tax preparation services and ID Theft service providers - to minimize your risk of becoming a victim of ID Theft.

Scam Central

Beware of the "Tax Rebate Scam"

If you haven?t already received your stimulus rebate checks, be sure you avoid two schemes thieves are using to steal your money and personal information.

How It Works:

In the first scheme, a thief calls your home, pretending to be an agent from IRS, and informs you that you are eligible for a large rebate. The thieves then ask for your personal information, checking account number and routing number so they can empty out your bank accounts and commit other fraud.

The second scheme comes in the form of an e-mail message that appears to come from the IRS. The message instructs you to click on a link to a fake website and complete a rebate form that requests personal information. The thieves then use your information to gain access to your bank account and credit cards.

Your Defense:

Remember: The IRS will never make an unsolicited request for your personal information over the phone or through e-mail so do not reveal any personal or account information to individuals who contact you in this manner.

To protect yourself against potential identity thieves, always take the following precautions:

  • Be skeptical of communications you receive from sources you are not expecting. Verify the authenticity of phone calls, standard mail, faxes or e-mails of questionable origin before responding.
  • Do not transfer funds or reveal secret passwords, PINs or other security-based data to third parties; genuine organizations or institutions do not need your secret data for ordinary business transactions.
  • Do not open attachments to e-mails of possibly questionable origin, since they may contain viruses that will infect your computer.

If you believe your identity has been stolen, call 866.SMART68 today.