The IRS issued a news release on February 17, 2016 identifying tax-related identity theft as the number one tax scam plaguing the nation. This scam occurs when someone uses a taxpayer’s stolen Social Security number to file a tax return claiming a fraudulent refund. The IRS has implemented additional verification procedures before issuing a refund, but the problem still occurs in staggering numbers. The IRS is partnering with states and tax professionals to target the problem, and is now asking taxpayers to take active measures to protect their personal information through an education program, the Taxes. Security. Together. campaign. Visit www.irs.gov to learn about this program, review security awareness tax tips, and the new security safeguards that will affect the 2016 filing season.
Many people are not aware that their personal information has been used in this manner until an e-filed return is rejected or government correspondence is received. When gathering your tax information for 2015, pay close attention to any 1099-G that you receive from a state taxing authority. If a state reports you received a refund, make sure you did in fact receive a refund, and that the amount matches your records.
When filing your 2015 tax return, many states will give you the opportunity to provide your driver’s license number for added verification. While it might seem counter-intuitive to protect your identity by providing even more personal information, the basic premise is that more data points would have to match before someone could successfully file a fraudulent return in your name. Currently, almost 20 states, including North Carolina, are requesting this information. At JPS, our tax software has been updated to populate this data on your e-filed return if you desire. This information is not required for North Carolina, or for your federal return. Please discuss this option with your tax preparer to determine if it could be beneficial for you.
Tax scams identified as number two (Phone Scams) and three (Phishing) also involve identity theft. In short, taxpayers should never respond to a threatening phone call from the IRS or reply to an unsolicited email from the IRS. A taxpayer who receives a suspicious email should forward it to firstname.lastname@example.org.
If you have concerns about protecting your identity, please let us know.