Feature Article
Mark Pribish
Fast Facts on the IRS and Cyber Tax Day
By Mark Pribish
Vice President and ID Theft Practice Leader

According to the IRS (http://www.irs.gov/newsroom/article/0,,id=217790,00.html), most taxpayers and tax preparers will take advantage of the IRS e-file to file federal tax returns. At the same time, the IRS e-file will also be used as a resource to request for an extension to file a tax return.

In addition, the IRS expects a total of 140 million individual tax returns - both paper and electronic - to be filed in 2010. Of this number, the IRS estimates that e-file tax returns will be greater than last year's total of 95 million returns. Based on the e-file trends of the last few years, Tax Day is now recognized as Cyber Tax Day.

While it is good to know that technology has provided the IRS and tax filers with new and more efficient ways to file a tax return, we need to remind ourselves that the same technology and information being used to file a tax return can also be used to help identity thieves steal our sensitive data that can be on a federal tax return and supporting documents including the following:

  • Wages, salaries, and tips
  • Taxable scholarships and fellowship grants
  • Pensions, 401-Ks, annuities, and IRAs
  • Health and medical information
  • Motor vehicle information
  • Mortgage (and other) loan information
  • Bank account information
  • Social Security numbers including those of dependants

That said, our tax related documents are a gold mine for identity thieves and since ID Theft and Fraud has become such a problem, the IRS now has a toll-free number to assist identity theft victims. The new IRS Identity Protection Specialized Unit (which opened in October 2008) will mark affected accounts so that identity theft issues may be resolved more quickly. Victims can call 1-800-908-4490 and speak with a customer service rep Monday - Friday, from 8 a.m. - 8 p.m.

An example of an IRS related ID Theft event is where your Social Security number is stolen and used by another individual to get a job. The employer of this individual would report income earned to the IRS using your Social Security number and thus it would appear that you did not report all of your income on your tax return. The IRS website (http://www.irs.gov) has more information for taxpayers who believe that they have a tax issue created by identity theft.

So while there is no way to completely protect against ID Theft and Fraud - especially when someone is using your Social Security number to get a job - you can take steps to reduce the chance of becoming an ID Theft victim with the following helpful tips:

  1. Be extra careful in receiving any calls or emails from the IRS - as tax scammers will ask for your Social Security number or bank account information - and the IRS will NEVER email you and will very rarely call you.
  2. Check references of your tax preparer and confirm whether your tax preparation service is on the list of authorized IRS e-file partners and that your tax preparer has adequate information security measures in place.
  3. If you prepare your own taxes, DO NOT e-file using shared internet connections like an open Wi-Fi network at a hotel, coffee shop or airport.
  4. Make sure you ENCRYPT (http://support.microsoft.com/kb/307877) your tax return files, maintain a strong PASSWORD (see January 2010 Password 101 ID Theft article), and ensure that your Internet SECURITY SOFTWARE is up to date.
  5. DO NOT use photo copiers in public locations as almost every copier that is five years old or newer has a hard drive (just like a personal computer) which can keep a permanent record of your tax return file.

Lastly, it is important to know that the IRS does not initiate communication with taxpayers through e-mail and that you should report phishing, e-mail scams and bogus IRS Web sites to the IRS.

To learn more about these threats and how to protect yourself and your family from Identity Theft, you can read my past newsletters at the Merchants Identity Theft Educational Website at www.idtheftedu.com.


Scam Central

Senior Citizen Health Insurance Scam

However you interpret the new Health Care Reform Bill and the effects it will have on you and your family, healthcare changes are coming. These changes in laws will affect everyone in a variety of ways. But for senior citizens, a new crop of very real concerns is also on the way as scammers try and take advantage of the confusion these laws will create.

How It Works:

You may receive a phone call or email from someone claiming to have better health insurance rates and coverage as a result of the newly enacted healthcare laws. They will ask you to change healthcare plans and claim they can save you money on your health coverage and prescription drugs. All you need to do is provide them with your personal information, and a credit card to enroll.

Your Defense:

The best defense against bogus telemarketers and phony email scams is to do your own research. Check state and federal laws to see how such changes in laws might affect you and your family. Call and speak with your insurance agentor other known insurance agencies or with an AARP representative to verify the claims of anyone trying to sell you insurance over the phone, or the internet. Be leery of anyone contacting you out of the blue with "special deals" for senior citizens.

You've worked hard all of your life and saved diligently for your retirement years. Make sure that money stays where it belongs, with you.

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