With shorter days approaching, bringing more hours of darkness along with them, it’s more important...
You’ve got your W-2, or will soon, and you’re hard at work pulling together all your statements and receipts for tax season. But while you’re preparing to file your taxes, scammers are working on ways to cheat you out of your return. In fact, the Federal Trade Commission (FTC) has already started receiving complaints.
To kick-off tax identity theft awareness week, and help you defend against fraud, we’ve got some insight into the most common scams, as well as how to protect your personal information, and what to do if you become a victim.
Two Common Tax Scams:
Tax Identity Theft
Tax ID theft happens when someone uses your social security number, and other personal information, to file a fraudulent return and get a refund. They might even use your information to get a job or claim your child(ren) as dependents to increase their return amount.In these scenarios, you won’t know you’re a victim until you try to submit your return. When you do, you’ll be flagged for having more than one return filed in your name. Or you might find out you’re responsible for paying additional taxes on wages from an employer you don’t know.
Whenever possible, you should file your taxes as early in the season as possible. This can help prevent scam artists from filing a fake return before you have a chance to file yourself. As an added bonus, you’ll be able to enjoy your return sooner.
IRS Imposter Scams
With IRS imposter scams, people aren’t pretending to be you—instead, they’re posing as IRS officials.
These scammers will call and accuse you of owing taxes that have to be paid immediately in order to avoid jail time. They’ll also demand that you deposit the supposed money owed onto a prepaid debit card and provide them with the card number, or send them the money electronically.
While this may sound a little extreme, and therefore easy to avoid, it can be hard to think clearly when there’s an angry person on the other end of the phone line—especially when they know your social security number.
Protecting Your Personal Information:
Tax ID Theft and IRS Imposter scams may be the two most common forms of fraud, but it’s important to note that con artists don’t limit themselves to these. They might send emails or direct you to websites that ask for sensitive information, or pose as a charity with the intention of getting you to donate your refund. And as quickly as we catch on to their scams, they come up with new ones.Here are some simple ways you can protect yourself no matter what scams are out there.
- Check letters, emails, and websites for spelling, punctuation, and grammar errors. Scam artists aren’t always concerned with reviewing and editing their work.
- Hover over links in emails before clicking on them to determine if you’re being sent to a legitimate website. And again, check for errors—it only takes one letter being off to send you to the wrong website. For example, they might try to send you to www.mcsu.net instead of www.mscu.net.
- Hang up on callers asking for personal information or money. If they say they’re a family member, friend, or from your financial institution, hang up then call back to verify using the number you have saved for that contact. This is a good tactic to use even when you recognize the number on your caller ID, because scammers now have the technology to make it look like they’re calling from legitimate phones.
- Protect your social security number and don’t give it out unless you have it. And when it’s required, don’t be afraid to ask why it’s needed, how it will be used, and how the information will be stored.
- Take advantage of ID monitoring and recovery services like ID Safe Choice. There’s a lot to choose from, so do your research ahead of time to ensure you have the monitoring and recovery support that’s best for you.
- Sign-up for account alerts. This is an easy way to receive real-time alerts for your account and card activity to help you catch fraud early.
- If you’re filing your taxes online, check to make sure your internet connection is secure.
- If you’re planning on filing with a professional, ask for recommendations and references ahead of time. A little research can make a big difference and ensure you aren’t sharing your information with someone posing as an accountant or return preparer.
- If you prefer to file your traditionally, make sure you mail your return directly from the post office. You don’t want all your personal information sitting in your mailbox.
- Shred old returns when they’re no longer needed. NerdWallet has a great article about how long you should keep tax records.
Recovering from Identity Theft:
If you’re a victim of identity theft, the best things to do is file a report with IdentityTheft.gov. Once you file a report, you’ll get advice and a recovery plan to help you resolve any issue caused by the theft. The IRS might also provide a personalized PIN number to protect your file and verify your identity in the future.Mutual Security Credit Union members also have access to fully-managed recovery services through IDSafeChoice Select. If you elect this benefit, you’ll have the comfort of knowing that if you or a family member is a victim of fraud, a personal Recovery Advocate will work on your behalf to recover your identity.
The best defense against any scam, and plan for recovery if you’re a victim, is making sure you’re educated. So we encourage you to check out the FTC website and follow their social media accounts for tips and details about informational webinars this week. Additional helpful resources can also be found on IC3.gov and the Consumer Financial Protection Bureau website.
You can also check out our upcoming in-branch events with H&R Block to get answers to all your tax questions.
