For many people, knowing a tax refund is on the way can be a big relief, an exciting treat, or both. And the sooner the refund arrives, the better.
For victims of tax identity theft, however, the wait can drag on for almost a year. Not to mention they may have to deal with a lot of red tape to get what’s rightfully theirs. That’s why it’s critical to understand:
This article will help you keep your hard-earned refund safe.
In 2016, employment- and tax-related identity theft were the No. 1 form of identity theft, accounting for 34% of consumer complaints.* In fact, tax-related identity theft has been a huge problem for the Internal Revenue Service (IRS) and taxpayers alike for many years. Here are some interesting statistics for your consideration:
These numbers are so high because, for many years, tax identity theft has been relatively easy. Criminals simply file a fraudulent tax return with a counterfeit W-2 form under the victim’s name and Social Security number (SSN) and then wait for a refund from the IRS.
If the IRS fails to identify the fraudulent return and sends a check to the fraudsters, then instead of a refund victims receive a notification that their return has already been filed.
A tax return could also be delayed if another person uses a stolen SSN for employment. For example, if an employer reports a fraudster’s income under your SSN, then your return will be flagged for unreported wages.
This year, the good news is that the IRS is getting better at detecting and stopping fraudulent returns. The bad news is that the identities of 143 million people were exposed in a data breach at Equifax in 2017, making tax identity theft awareness critical.*****
Filing your taxes early is the best thing you can do to reduce the chance of becoming a tax fraud victim.
Submitting your taxes as soon as possible after receiving all the necessary paperwork from your employer or clients reduces the chance that crooks will file ahead of you in your name.
It’s also important to be on the lookout for warning signs for tax-related identity theft, which include:
If you are a victim of tax-related identity theft, it’s important to do the following:
VyStar has partnered with CyberScout® to help protect you against hackers and thieves by providing identity management, credit monitoring and cyber security services. Please visit our Protection Center to learn more about our FraudScout® Fraud and Credit Monitoring Services, or contact VyStar at (904) 777-6000 or 1 (800) 445-6289.
*“Consumer Sentinel Network Data Book,” FTC, March 2017.
**“What the IRS Isn’t Telling You About Identity Theft,” USA Today, January 2016.
***“Interim Results for the 2016 Filing Season,” Treasury Inspector General for Tax Administration, March 2016.
****“Identity Theft and Tax Fraud,” GAO Highlights, January 2015.
*****“Your Next Worry After the Equifax Breach: Fake Tax Returns,” CNBC, September 2017.
******“Taxpayer Guide to Identity Theft,” IRS, 2017.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.