About two years ago the topic of identity theft became personal. I was aware identity theft happened; I had several clients who’d had their identities stolen, and I had attended hours of trainings on how to protect yourself from identity theft. However, on a certain level, I was in denial that this was something that could happen to me. After all, I had credit monitoring—I was fine!
Then one day I grabbed the mail on the way into my home and was casually flipping through all the junk, about to throw the entire stack away, when I noticed a letter addressed to me from Golden Valley Lending. My initial reaction was that it was just another piece of junk mail, but there was something about it that made me decide to go ahead and open it up. Inside was a not-so-nice letter explaining that I had defaulted on my payday loan and that they were going to commence collection efforts. My reaction at that point was still that this must be a scam, someone trying to get me to pay them. Like I said, I had credit monitoring—this couldn’t be real!
I spent the next several months unraveling what had happened, and I learned quite a bit in the process. Someone had obtained my personal information and had applied for eighteen online payday loans with Indian Tribe lenders. I learned that by doing so, this person bypassed the entire credit monitoring process, as these lenders don’t actually report to the credit bureaus. I also learned that the most likely next step for whoever had applied for these loans was to steal my tax identity.
Another annual income tax deadline has come and gone. Maybe you had to pay, but perhaps you were owed a refund. If the latter is true, did you receive it?
A lot of taxpayers didn’t, because hackers swooped in and stole their sensitive tax-related information. Tax identity theft is a serious problem, despite the IRS’s efforts to stop it.
But there are steps you can take to keep from being a victim, some of which are simply a matter of common sense. For example, consider the security of any wireless network you use when you’re working on your taxes. Don’t ever do so on a public network, and make sure your home or office wireless is password protected.
You don’t have to be online to be at risk for tax identity theft. Hackers can grab your personal information in other ways. For example, do you ever carry your tax-related papers back and forth to work or some other location? Know where they are at all times; don’t ever leave them lying around where someone can copy your Social Security number and other details.
Always be aware of your surroundings. If there are other people around when you’re working on your taxes—if you’re in a coffee shop or library, for example—make sure no one is reading over your shoulder.
Phone calls can be risky. A good rule of thumb is to never provide someone who calls you with any sensitive personal data—unless you can verify it was a call you were expecting, like one from your bank or a medical office. When you place a call to a legitimate number, it’s generally okay.
You’d think that a call from the IRS would be safe. In reality, the IRS doesn’t ask for personal information over the phone. They send letters through the U.S. Mail. If you ever get a phone call from someone who claims to be from the agency and is demanding some sort of payment immediately, hang up. This is a popular phone scam. You can always contact the IRS directly to see if there is some sort of issue.
Don’t make a practice of carrying your Social Security card with you. Keep it in a safe place unless you absolutely need it away from home for some reason. Also:
Be especially careful if you’re preparing your taxes on a website. Before you even begin, investigate the publisher’s security protocols to ensure that your very sensitive tax-related data will be treated with great care. Also, update any applications that will be involved, including your browser and antivirus/antimalware tools.
The IRS will never send you an email out of the blue asking you to click a link or download an attachment or fill in fields to update personal information. In fact, it’s a good idea to avoid taking those actions ever unless you’re expecting an email and can verify the sender’s address.
Finally, use a very strong, unique password—one you don’t use anywhere else. You’re probably tired of hearing that piece of advice, but it’s absolutely critical when you’re working with a tax preparation application.
Take Action Quickly
It’s possible to get stung by a tax identity thief even if you’re being careful. If it happens to you, you’ll need to complete and submit IRS Form 14039, Identity Theft Affidavit, and watch for responses from the agency. Contact your credit bureaus and financial institutions to apprise them of the situation. Tax identity thieves sometimes try to open new credit cards, for example. You should also file a report with the FTC
Completing this affidavit was the final piece of recovering control of my identity. Once I filed this form with the IRS, I was assigned a PIN to use when I e-filed my tax return. The IRS would not accept a return using my personal information without this PIN.
Recovering from tax identity theft isn’t a quick process or an easy one. However, taking these precautions will go a long way in prevention. If you are a victim of tax identity theft, be assured that there is help available!