4 Tips for Preventing Tax-Related Identity Theft

A 1040 tax document with glasses and a pen.

The IRS’s tax filing season officially kicked off on January 29, 2018. Taxpayers have until April 17, 2018 to submit their returns. As you prepare your return in the coming months, it is important to be cognizant of the threat of identity theft. As explained by the IRS, “tax-related identity theft occurs when someone uses your stolen Social Security number (SSN) to file a tax return claiming a fraudulent refund.”1

Being a victim of identity theft can be an incredibly disruptive and burdensome experience. The good news is that there are a number of simple measures taxpayers can take to dramatically reduce the risk of having their SSN stolen. Tennessee State Bank has put together a convenient guide to preventing tax-related identity theft.

1. File Your Tax Return Early

The Federal Trade Commission recommends filing your return early in the tax season in order to reduce the risk of identity theft.2 When criminals file false returns to claim other people’s refunds, they usually submit their returns as early as they can. The scam hinges on the IRS processing the fraudulent return before the legitimate one is received. When taxpayers file their returns early, it makes it much more difficult for an identity thief to beat them to the punch.3

2. Take Cyber Security SeriouslyA woman using cyber security software on her computer.

As more and more financial activity moves online, it is important to employ the best cybersecurity practices. Necessary tools for keeping your computer secure include virus/malware protection, file encryption for sensitive data, and a firewall. When giving out personal information online, make sure that the website in question has an “https” web address, which indicates that it is encrypted.4

Using strong passwords to protect your data is also crucial. According to The Washington Post, the most effective passwords are devoid of personal significance, have at least 12 characters, and contain two or three different types of characters in unpredictable places. Password managers and two-factor authentication can also boost security.5

3. Don’t Fall for Phishing

The word “phishing” refers to a ploy in which criminals attempt to obtain sensitive information by posing as a trusted institution in an email, text message, or another type of electronic communication. Whenever you receive a message that is purportedly from the IRS or a company, go directly to their website instead of relying on the links in the email. Also, never open an email attachment from someone you don’t know, as it may contain malware.6

A woman speaking on the phone while looking at a computer screen.4. Report Identity Theft Immediately

There are a few warning signs that can indicate possible tax-related identity theft. Common red flags include being contacted by the IRS about multiple tax returns filed under your name or records showing that you received wages from an employer that you never worked for. If you believe that you are a victim of identity theft, file a complaint with the FTC as quickly as possible. Victims should also contact the IRS and complete an Identity Theft Affidavit, if applicable.7

About Tennessee State Bank

Tennessee State Bank has been serving our local community for over 45 years. With branches in Sevier County, Knox County, Cocke County, and Jefferson County, we offer convenient banking services in East Tennessee. Whether you’re looking to open a checking account, obtain an auto loan, or apply for a home mortgage, we make the process as simple and straightforward as possible. Tennessee State Bank’s motto is “Banking at its Best!”SM, and we strive to live up to that creed every day. Let us know how we can help you by sending us a message via our Contact Form.

 

 

Tennessee State Bank is Member FDIC and an Equal Housing Lender.
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References
1. Department of the Treasury Internal Revenue Service. Publication 5027 (Rev. 3-2017) Catalog Number 67495R.
2. Gressin, Seena. Federal Trade Commission Consumer Information.
3. Salisbury, Susan. The Palm Beach Post.
4. Department of the Treasury Internal Revenue Service. Publication 4524 (Rev. 9-2015) Catalog Number 48359Q.
5. Cranor, Lorrie. The Washington Post.
6. Department of the Treasury Internal Revenue Service. Publication 4524 (Rev. 9-2015) Catalog Number 48359Q.
7. Department of the Treasury Internal Revenue Service. Publication 5027 (Rev. 3-2017) Catalog Number 67495R.