Tips for protecting against tax-related identity fraud

Consumers can lower their risk of tax refund fraud by recognizing scams, protecting sensitive information and watching for early signs of identity theft.

Tax-related identity fraud has become a prevalent problem in recent years. In 2015, the Federal Trade Commission identified this fraud as the most rapidly growing form of identity fraud, according to Forbes. In 2016, the Internal Revenue Service put tax-related identity fraud at the top of its list of common tax schemes that consumers should beware of.

Notifying the IRS of tax-related fraud and resolving any related tax issues can be a confusing and prolonged process. Consequently, Atlanta residents can benefit from understanding the measures that can frequently help prevent this type of fraud.

Shield sensitive information

Forbes recommends that consumers take several steps to protect their sensitive personal information from misuse or theft. These include the following measures:

  • Avoid sharing Social Security numbers unless doing so is absolutely necessary.
  • During online transactions, always review each company's privacy policy or refrain from sharing nonessential information.
  • Avoid using public Wi-Fi connections, especially for tasks that can expose sensitive data, such as online banking.
  • Secure or shred physical documents that contain personal information, such as credit card statements.

People who have moved or intend to do so should also make sure to update their mailing addresses immediately. In addition to filing a change of address form with the postal service, consumers should inform their financial institutions and the IRS of the relocation.

Check accounts and credit

Consumers should also be alert to warning signs of identity theft, such as suspicious activity on any bank accounts or credit cards. Most people can benefit from regularly monitoring these accounts, along with their credit report. Consumers may also want to check whether their financial institutions offer fraud alerts, which can help ensure that any unauthorized activity is caught early.

Know common scams

The IRS advises consumers to be wary of disclosing personal information to people who claim that they represent the IRS. As a matter of policy, the IRS does not directly call or email consumers to discuss individual or business back taxes. Similarly, legitimate IRS representatives will not demand immediate payment for any outstanding liabilities.

Forbes recommends that consumers also caution when dealing with any emails or phone calls that ask for personal information. Consumers should avoid clicking on links that appear in unsolicited emails. Consumers also should take time to verify that a website or company is legitimate before sharing any sensitive personal information.

Seek legal help

Unfortunately, these protective measures may not prevent every instance of tax-related identity fraud. People who think they may be victims of such fraud should promptly notify law enforcement authorities and the IRS. People in this position may also benefit from consulting with a tax attorney who has experience addressing tax refund fraud. An attorney may be able to assist a person in seeking a fair and expeditious resolution to any accompanying tax issues.