BBB Warns Of Tax Identity Theft

RALEIGH – Consumers and businesses aren’t the only ones participating in tax season; so are scammers. Con artists use personally identifiable information of unsuspecting consumers to file phony tax returns and steal refunds. Last year, identity theft alone resulted in almost $2,000 lost by consumers in our 48-county service area. Tax ID theft is a particularly sneaky con, because victims typically don’t realize they’ve been targeted until they actually file their taxes. Better Business Bureau, Eastern Carolinas (BBB)  has tips to prevent tax identity theft and what to do if it happens to you.

“If you have not filed a tax return yet, be aware that a scammer may try to file under your name,” said Mallory Wojciechowski, BBB President and CEO. “Protect your personal information whenever possible; shred sensitive documents and do your filing on a secure network.”

BBB Tips to Prevent Tax Identity Theft:

• File early. The best way to avoid tax identity theft is to file your taxes as early as possible, before a scammer has the chance to use your information.
• Watch out for red flags. If a written notice from the IRS or CRA arrives in the mail about a duplicate return, respond promptly. Or, if an IRS or CRA notice arrives stating you received wages from somewhere you never worked, or receive other notices that don’t actually apply to you, contact the IRS or CRA office immediately. Another big red flag is if you receive a notice that “additional taxes are owed, the refund will be offset or a collection action is being taken against you for a year you did not file a tax return” (IRS). Contact the IRS or CRA if you have any suspicions that your identity has been stolen.
• Secure your personal information digitally. Use strong passwords for online accounts, enable two-factor authentication when available, and avoid storing sensitive tax documents on unsecured devices or cloud storage.
• Avoid filing taxes on public wifi. If you file taxes electronically, avoid using public Wi-Fi networks that might be vulnerable to hackers. Use a secure, private network or a virtual private network (VPN).
• Protect your Social Security or Social Insurance Number. Don’t give out your SSN, SIN, or other personally identifiable information unless there’s a good reason, and you’re sure who you’re giving it to.
• Research your tax preparer. Make sure your tax preparer is trustworthy before handing over your personal information.
• Use your Identity Protection PIN (ID PIN). In the United States, this six-digit number, which, in addition to your Social Security number, confirms your identity. Once you apply, you must provide the IP Pin each year when you file your federal tax returns. Visit IRS.gov for more information. 
• Shred sensitive documents. Before discarding old tax forms or documents containing your personal information, shred them to prevent dumpster divers from accessing your data.

If an Identity Theft Attempt was Made:

Report identity theft to identitytheft.gov and the IRS. Also, consider informing your state tax agency. Taxpayers who become victims of a scam may be able to claim a theft loss deduction under IRC § 165 if the loss was a result of criminal conduct classified as theft, was a transaction entered into profit and there is no prospect of recovering the stolen funds.