IRS: Be on Guard For Identity Theft and Other Tax Season Scams

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As if tax time wasn't painful already, here are tips to prevent a scammer from stealing your tax refund.

If you’re not careful, you could find yourself doing battle for your tax refund.

Identity theft at tax time remains at an all-time high and is one of the primary concerns on this year’s IRS list of “Dirty Dozen” tax scams.

In the most common tax-time fraud scenario, scammers file a fraudulent return for your refund early in the season. You may not discover that there’s a problem until you try to file your legitimate tax return. And at that point, you’ll have a problem to resolve, which can take months, even years.

So, one common sense measure: File early, and give would-be scammers less time to get their hands on your Social Security number and file a fraudulent return.

Unfortunately, that’s not the only form of fraud you have to worry about.

The fastest growing type of tax-time scam involves fraudsters pretending to be IRS agents, who call and demand hefty payments to settle tax obligations they claim are outstanding. Complaints about IRS imposter scams like this jumped to 54,690 in 2014, up from 2,545 a year earlier, according to Federal Trade Commission statistics compiled from federal, state and local law enforcement and consumer protection agencies,

So, lesson No. 2: If someone calls from the IRS, that’s a red flag. The IRS doesn’t initiate contact with tax debtors by phone; the first form of contact is through snail mail. For more details on that lesson, see our Money Talks News report from August, “Why You Should Hang Up if You Get a Call From the ‘IRS‘.”

Although the IRS says it is making progress fighting tax-related identity theft and other types of scams, the agency stresses that consumers need to be vigilant.

“Scams can be sophisticated and take many forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues,” IRS Commissioner John Koskinen said in a press release Monday. “Keep your personal information safe and secure.”

Specifically, the IRS recommends you take these measures:

  • Store Social Security cards in a safe place
  • Refrain from sharing identifying information unless you initiate contact
  • Remain vigilant of your credit report
  • Conceal personal documents in your home
  • Protect your electronic devices with antivirus software
  • Analyze the earnings statement from the Social Security Administration annually

The IRS release notes that it had “stopped 19 million suspicious returns and protected over $63 billion in fraudulent refunds” between 2011 and October 2014. But if your refund falls into the other camp — stolen — those large numbers don’t provide much comfort.

If you suspect you’ve been victimized by one of these scams, contact the IRS immediately.

What are your thoughts on the tax identity theft debacle? Please share them in the comments below or on our Money Talk News Facebook page.

For more tips on how to get your taxes filed fast and correctly, watch this video on common, and easily avoidable, mistakes.

Stacy Johnson

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