Tax Season is Here – File Early to Avoid Scams
Tax season is here and the race begins between individuals collecting all their tax related forms in order to file their legitimate returns, and criminals who are intent on filing fraudulent returns and collecting the refunds. The most recent figures for identity theft from 2012 show Florida as being number one in the United States with 361 complaints for every 100,000 residents, according to the Federal Trade Commission (FTC). The top five metropolitan areas are all in Florida, with Miami at the top of the list. The other four are Naples, Tampa-St. Petersburg, Fort Myers-Cape Coral and Tallahassee. Miami is also at the top for Medicare and mortgage fraud. The specific problem of tax refund identity theft exploded to 1.1 million cases in 2011, from just 51,700 in 2008. According to Wilfredo Ferrer, the United States Attorney for the Southern District of Florida, a criminal armed only with a laptop and an internet connection can easily file hundreds of fraudulent tax returns seeking thousands or even millions in refunds.
With e-filing, evidence of fraud is difficult to find. There are no signed tax forms, envelopes or fingerprints, and e-filing promises quick refunds. For criminals to e-file in your name, they need your name and Social Security number, combined with a phony W-2 (wages) or fabricated Schedule C (business income). ID thieves steal your personal information and then use it to file a fake tax return in your name, usually tweaking the numbers to get a large refund. The refund can be posted to an anonymous “Green Dot” prepaid Visa purchased at a drugstore, Wal-Mart etc. The taxpayer who’s ID has been stolen will not find out until he/she attempts to file the real return, and is then told by the IRS that the return has already been filed and refund sent. Hence the primary reason to file as early as possible, before a potential criminal attempts to do so on your behalf.
Steps to Protect Yourself
- As stated before, file your return early. Identity thieves often submit their fake returns early in the filing season — which is why you might want to file as early as possible — before the criminal has a chance. Use a reputable tax professional or use legitimate tax prep software programs. Research tax preparers at bbb.org to find ones those that are local and accredited.
- The IRS has issued several consumer warnings about the fraudulent use of the IRS name or logo by criminals trying to gain access to consumers’ financial information in order to steal their identity. Criminals will use regular mail, telephone, fax or email to set up their victims. The IRS does not initiate taxpayer communications through email. Unsolicited email claiming to be from the IRS, or from an IRS-related component such as the Electronic Federal Tax Payment System (EFTPS), should be reported to the IRS at firstname.lastname@example.org.
- Clicking on attachments to or links within an unsolicited email claiming to come from the IRS may download malicious computer software (malware) onto your computer, tablet or smart phone. Use up to date anti-malware on ALL computers, especially one’s being used to file tax returns. The University currently has contracted with McAfee for anti-malware software. This software is available for current employees (and students) for personal computers. Contact your IT liaison if you have questions. Note the anti-malware must be updated frequently to be effective. Daily updates are recommended.
- Similarly regularly update your operating system, browser and other application software. So not only should you be updating your OS like Windows, Mac, iOS, Android etc, you should also be updating your browser(Internet Explorer, Firefox, Chrome, Safari etc) as well as applications such as Microsoft Office, Adobe Acrobat, Reader, Flash, Oracle Java and Apple iTunes. Individuals are increasingly using tablets and smart phones. These devices and their apps must also be updated.
- Use secure, encrypted wireless connections when accessing banks, credit cards, and doing your tax returns. Using the free wireless at your local Starbucks or Barnes & Noble when doing your taxes, or accessing your bank is not a secure practice. Be aware that many hotel and airport wireless networks are also not secure.
- Shred credit card statements, tax documents, health insurance statements (EOBs) and any other documents containing personally identifiable information (PII) before disposal. Identity thieves do sift through dumpsters looking for documents with PII. Of course, follow the same practice in securely disposing of any University documents that contain PII/PHI (Protected Health Information), including that of patients, employees, donors, job applicants, students, clinical trial participants etc. The School of Medicine has a contract to provide centralized shredding services through the Physical Plant’s Environmental Services – for further information please call 305-243-1052 or via email at email@example.com. You should also securely wipe data from university computers, tablets, smart phones, USB drives etc. before disposal. Contact Information Technology for further assistance.
- Never give your Social Security number or other sensitive personal information by phone to unsolicited callers. There are on-going scams with criminals who call, pretending to be from a legitimate company, and who then proceed to ask for personal information such as SSNs, mother’s maiden name etc.
- A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. The taxpayer may be asked to complete the IRS Identity Theft Affidavit Form 14039.
- The FTC also takes and reviews general identity theft complaints. To file a complaint go to the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).
For More Information
- IRS - Taxpayer Guide to Identity Theft
- Identity Theft Getting Worse: What You Need To Know For Tax Season
- Tax Season Brings Out Identity Thieves
- Tax-Related Identity Theft
- Avoid Tax Identity Theft
- Prosecutor: Fla. Tops US in ID theft, Tax Fraud