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The Resource Center Identity Theft & Protection The Resource Center | article

Tax Race Tip #2: File Early

Beat the thief to your tax refund by filing early. Tax-filing season is upon us and Identity Guard wants to help you file safely and easily.

Last week we talked about how preparation is key for a stress-free tax season; today we're going to focus on the best thing you can do in order to prevent an identity theft from making off with your tax refund: filing early.

This time of year is ripe for fraud because with just a few pieces of information an identity thief can make a fake tax return and submit it in your name. If they get submit a tax return before you do, they'll get your refund and your legitimate tax return will be flagged as fraudulent by the Internal Revenue Service.

You might be thinking, "Well I don't have to worry about this, because my SSN is secure." The unfortunate truth is that millions of Americans have their personal information compromised every year. From addresses to Social Security Numbers, none of us can really be sure that our information hasn't been breached, used to open accounts, or sold for later use. According to a report from Norton by Symantec on cybersecurity insights, "more than 348 million identities were exposed when identity thieves hacked several trusted institutions," in 2014.

And if you know for sure that your information has been involved in a breach, like for example customers of Anthem—filing early is essential.

There are several other reasons why filing early should be your priority come tax time. Because of budget limitation and manpower issues, the IRS rarely investigates tax fraud involving refunds under $10,000. Although the IRS has received an additional $290 million in funds this year to better customer service, improve tax-payer services, and detect and prevent tax-related fraud; many believe this isn't enough money to fund all the IRS is supposed to accomplish.

"While the bill contains a modest increase in IRS funding, the IRS budget would still be well below the level the agency needs to provide the kind of quality service the American people deserve," Treasury Secretary Jack Lew said in a statement.

Last year, the IRS paid out an estimated $5.8 billion in fraudulent returns, prompting the government agency to propose plans to help reduce tax fraud by proving better information to taxpayers and team up with tax administrators and companies in the tax industry. And while the effort is commendable, nothing will ever be foolproof.

It is up to us to do all we can to protect our tax refunds, which means filing early. Remember: file early and beat the thief to your tax refund.

Identity Guard is committed to helping you not only protect yourself from identity theft, but also understand how it can happen. Count on us to get tips and advice to help guard against all sorts of identity related fraud, including tax fraud.

Want to read more great tax tips? Follow us on our blog, Facebook, Twitter or LinkedIn to keep up with our weekly #TaxRace series for more essential tax time tips.