Avoiding Identity Theft During Tax Season

Identity Theft During Tax Season

As the deadline for income tax returns loom in the distance, a top tax preparation new york city firm warns of more and more identity thefts. A common finance fraud during one of the busiest times of the year, identity theft is simpler than one might think. All a scammer has to do is get a hold of three things: your Social Security number, your name, and your birthday and he can file your income taxes for you.

Of course, that would mean he’ll get your refunds too.

Danger Lurks Everywhere

It’s not just individual taxpayers that are at huge risk of getting their identities stolen. Small and medium businesses (SME’s) need to be more careful because they do plenty of fiscal transactions and deal with all kinds of people on an average day. These interactions open up doors to potential thieves just waiting for their opportune moment.

All forms of communication are susceptible to fraud. Whether it’s snail mail or email, one should take extra precautionary steps in order to avoid being scammed. It can happen to anyone, anywhere, at any time.

Common Identity Theft Scams

  • Filing fake tax returns to get a refund
  • Using someone’s SSN to claim a dependent
  • Getting a notice of payment from an unknown source or employer
  • Filing a tax return on deceased persons
  • Contacting an individual (by phone or mail) to get personal information

What’s Your Number?

One of the first things a fraudster will do is try and get a hold of your SSN and other personal details (such as birthdays and PIN numbers). REMEMBER: the IRS will never contact anyone through SMS, email or by phone. They always use the traditional mail system. So if you receive anything suspicious, like notices that you believe are not from a legitimate government agency, report them immediately to this number: 1-800-908-4490.

When filing your taxes online, ensure two things: first, that you’re using multiple layers of online security (such as data encryption and a secured server); two, that your accountant or tax preparer is a trusted entity. There are plenty of accounting services out in the market, local and off-shore. If you’re dealing with them only during tax season and you’re not careful, they could as easily be instruments of fraud. Protect yourself by hiring only certified finance experts.

Check and Balance

If you can, especially if you’re a small business owner, check all your fiscal transactions at least once a week. That way, you can quickly spot errors or discrepancies if there are any. This is where the services of a trusted bookkeeper and accountant is highly important. They can regularly keep your records updated and organized; making it simpler for you to manage your finances come tax time.

Even if you’re not a victim of tax fraud or identity theft, but you know of someone who was, report this immediately to the IRS. Being proactive is vital in order to protect not only yourself, but also your fellow entrepreneurs and taxpayers. Even after tax season has ended, identity thieves and fraudsters still abound – so ALWAYS be on the lookout


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