This is the time of year when every taxpayer gets excited and waits for the mail with bated breath to receive an envelope printed with “Important Tax Return Document Enclosed.” Yep, it’s tax time! Yay!
Just kidding. Not many taxpayers, if any, are gleeful about tax time. But there is a segment of the population that looks forward to this time of year: tax scam artists! These are the impostors and thieves that steal your identity, filing false tax returns in your name. These types of scams have become so pervasive that the Federal Trade Commission has established the “Tax Identity Theft Awareness Week” for Feb. 3-7.
Basically, tax identity theft occurs when someone uses your Social Security number to file a phony return and collect what would be your tax refund. Most often you don’t become aware there is a bogus return until you file your legitimate return and receive a rejection letter from the IRS because of duplicate filings. Yes, the IRS will investigate, but your tax refund will often be delayed for several months.
How did the scammers get your information? Most often, what happens is you receive a phone call from someone pretending to be an IRS, Social Security or other government agent. They often claim that you owe back taxes or that your Social Security account has been frozen. They ominously threaten you with immediate arrest or other terrible outcomes if you don’t cooperate. They then do their best to get all the personal information they can. They will often demand you pay right now, with a gift or debit card, but they really hit the jackpot if they can get your Social Security number!
So how do you protect yourself from the situation? Here are some things to keep in mind:
• The Number One, Most Important Thing you can do throughout the year is to never give out your Social Security number unless YOU initiate contact and you know EXACTLY who you’re giving it to. Protect it! Protect it! Protect it!
• File your returns as soon as you can. Do not delay. Scammers are notorious for filing phony returns as early as possible. If you file before the scammer does, they will be the ones getting the rejection letters from the IRS.
• Wherever you keep your tax records, be sure to keep them secure, whether in a lockbox under your bed or kept digitally on your computer. Utilize the latest computer security steps. Make sure you keep your paper documents under lock and key, preferably in a safety deposit box at your local bank or in a fireproof lockbox at home.
• When filing, use a secure Internet connection if you file electronically or, if you mail your tax return, mail it directly from the post office.
• Avoid getting scammed by an unscrupulous tax preparer. Thoroughly research them before handing over any personal information.
• It is also very wise to check your credit report at least once a year to see if anyone has stolen your identity and opened a new account in your name! You can get a free credit report once a year at www.annnualcreditreport.com.
If you think someone stole your tax refund, call the IRS Identity Protection Specialized Unit immediately at 800-908-4490. Gather all paperwork and other documentation you can get your hands on. Doing so will help prove you are who you say you are.
Also be aware that, even though someone has filed a fraudulent return in your name, you must still file the correct one. Submit your return on time and pay what taxes you owe to avoid penalties and interest.
Cheryl Parson is president of the Better Business bureau serving West Central Ohio. The BBB may be found on the Internet at www.lima.bbb.org.