Identity thieves prey on unsuspecting victims throughout the entire year. However, as tax season approaches, these criminals ramp up their efforts to steal your identity and your money.
While you should always remain on guard against this threat, you should heighten your awareness and be ready to act during tax season. You can keep your identity, your money, and your future secure by understanding why and how these thieves operate, as well as what you can do to stop them.
Implications of Identity Theft
Once a scam artist has your personal information, such as your Social Security number and date of birth, this person can wreak havoc on your life. The thief can apply for jobs and housing, welfare, credit cards, open bank accounts, and file a tax refund under your name.
You will be left to clean up the financial mess this person leaves behind and could face paying thousands of dollars in bills for which you are not liable. It can take years to recover your credit rating, your finances, and your normal life again. It is vital that you know how to recognize if your identity has been stolen.
Signs of Identity Theft
The first signs of identity theft often do not show up until a few months or even a year after someone has stolen your information. However, once signs begin to point to this crime, the thief may have racked up thousands of dollars of debt in your name. Even more, the scam artist may have already filed a tax refund with your Social Security number.
Given these risks, you should know some of the indications that your personal information has been stolen. Some of the more common signs of identity theft include:
- Getting an IRS notification of taxes owed during a year you did not file
- You receive an IRS notice that you owe more money than usual during a typical tax year
- IRS records show that you worked for an employer that you do not know
- You have bank accounts open in your name that you did not authorize
If you are notified about any of these signs, you should act quickly to halt or reverse the damage to your credit and finances.
Reacting to Identity Theft
Your first reaction to learning that your privacy has been violated may be one of anger, confusion and fear. As much as you may want to give into these emotions and let your fears get the best of you, you should act quickly and rationally to minimize the damage inflicted by the scam artist.
You can begin to reclaim your life by:
- Responding quickly to all IRS notifications
- Filing a police report with your local law enforcement
- Filing a complaint with the Federal Trade Commission
- Contacting all three credit bureaus and placing a fraud alert on your file
- Contacting your bank and closing any accounts opened without your authorization
Along with filing a police report, contacting your bank, and making a report with the FTC, you also need to alert the IRS about your identity being stolen. This step should be taken before the IRS begins to target you for any fraudulent returns filed under your name. If you fail to alert the IRS, you may be held responsible for any taxes owed or any refunds that must be paid back to the government.
To alert the IRS about your identity being stolen, you can file a Form 14039-Identity Theft Affidavit. If you are responding to an IRS letter about taxes owed or a return filed under your name, you should check the first box on the form, indicating that the theft is affecting your tax records. If your tax records are not affected, but you want to put the IRS on notice that the theft may affect your future records, you should check the second box on the form.
These steps can start the process of reclaiming your privacy. However, when you want to protect yourself and your information before this crime occurs, you should know what steps to take at home to secure your personal details.
Protecting Yourself from Identity Theft
Scam artists have a more difficult time stealing your information when you take proper steps at home to protect yourself. Protecting yourself from this crime requires that you pay attention to how you handle your own sensitive details.
For starters, you should keep documents with your Social Security number, birth date, and other sensitive details locked up securely. By keeping these papers stored safely, you minimize the chance that an identity thief can find them.
Next, you should protect your privacy stored on your computer. This step can call for you to:
- Put a password on your computer to limit others' access
- Store personal information on a flash disc or CD rather than your hard drive
- Avoid downloading peer-to-peer file sharing programs
- Keeping your anti-virus and spyware programs updated and running
Along with storing documents and restricting access to your computer, you should also check your mail daily. Identity thieves steal mail from unsecured mail boxes and use information they find to steal people's identities. You can also make it more difficult to hack your information by:
- Not keeping your Social Security card or papers with that number on it in your purse, wallet or car
- Avoiding giving out your Social Security number to retailers, department stores and other businesses
- Only donating to known charities
- Using reputable tax preparation services and getting your tax preparer's identification number
- Checking your credit reports and Social Security Administration earning report each year
Tax season provides opportunities for thieves to steal your identity. You can stop them by knowing the signs of identity theft and acting quickly to restrict their access to your privacy.