This year’s tax filing deadline is April 18, but you don’t want to wait until the last minute to get all of your paperwork in order. Like any other important task, its generally best to file your taxes as soon as possible so you aren’t rushing to get it done at the last minute.
An unexpected audit isn’t the only thing you have to worry about during tax season. The IRS reports that there has been a surge in identity theft attempts aimed at both taxpayers and tax professionals. In fact, according to Accounting Today, the agency has seen a 400 percent increase in malware and email phishing efforts to this end.
This is not a new problem, and the IRS has been struggling for a number of years to tamp down security flaws and protect taxpayers. That being said, the agency estimates that it paid out as much as $5.8 billion in fraudulent returns to thieves in filing season 2013. There is clearly more work to be done.
Taxpayers can also take certain precautions to reduce the chances that they will become victims of identity theft. Filing early is one way, but the IRS offers some more tips that everyone should consider this tax season.
- Make sure you are seeking help from a real tax preparer. How much do you know about the person you have hired to help prepare your tax return? Make sure to research them through reputable sources like the Better Business Bureau to make sure that they can be trusted with your tax information.
- Avoid answering suspicious emails. We may live in a digital world, but the IRS still operates through the mail. This is incredibly important to remember, because many scams start out as unexpected phone calls or emails from someone claiming to be a representative from the IRS. Don’t ever reply to these messages with your personal information. If the IRS really wants to get in touch with you, it will send an official letter.
- Keep your tax records secure. You should always retain a copy of your federal and state tax returns every year, along with any other related materials. The IRS recommends that you keep them for a minimum of three years and a maximum of seven. Among other things, these documents will help you prepare your taxes in subsequent years. But don’t just leave these documents lying in your desk. Secure all hard copies in a locked safe, and encrypt any electronic files.
Even if you take precautions, there is still a chance that your identity will be compromised in some way. Like many victims, you could file a tax return, only to find that someone else has claimed a refund under your name.
If this happens, you should immediately notify the IRS and file a police report. You’ll be able to request an identity protection PIN from the IRS, which is a six-digit number that will prevent others from misusing your Social Security Number on federal tax forms. Also be sure to review your other online accounts – especially financial ones. If a thief was able to compromise your tax information, there’s no telling what else they were able to get a hold of. You’ll want to have a complete picture of the crime.
It’s important for taxpayers to remember that their information is never completely safe, even with the IRS making a serious effort to improve security. If you have concerns about identity theft, consider investing in an identity theft protection service like Identity Guard. Our service will monitor your credit file, Social Security Number and public records, and notify you of certain activity that could indicate fraud.