3 Tips To Protect Yourself From Tax Return Fraud

April 8, 2015

tax fraud

Tax return fraud is currently the largest scam in the United States. In 2014, over 100,000 cases of tax identity theft were reported to the FTC resulting in $6.5 billion stolen. Here are some tips to protect yourself from this all-too-common modern crime.

1. Create an online account with the IRS

Fraudsters will try to beat you to the punch by filing your return before you do and thus receive your refund. The first step they will take is to set up this account, so make sure you have done this as soon as possible. The IRS has more details here.

2. File as early as possible

Statistics show that tax return fraud is more likely to happen the later you file. The IRS processes returns in the order received. If they receive a fraudulent return with your Social Security Number (SSN) on it, that will be the return they process. The quicker you can get yours in, the less likely this will happen.

3. Protect your Social Security Number

Never give out your full SSN unless you absolutely have to. There are certain situations where you are legally required to give it out, but if it’s not the government asking you are entitled to provide alternative means of identification. Shred any documents containing your SSN and never give it out on the phone or via email (the last 4 digits are fine). It should be noted that the IRS will only ever initiate contact with you through the mail; any other communication pretending to be the IRS through other media is most likely fraudulent.

Alliance for Affordable Services members have unlimited access to CPA advice on tax questions and concerns. For more info, see the benefits list here.