How to Avoid Tax and Personal Information Fraud

Tax season can be a prime time for scammers to target individuals, aiming to steal personal and financial information. Protecting yourself from tax fraud and identity theft is crucial to avoid financial losses and the misuse of your personal information. Here are key steps you can take to stay safe:

1. Be Cautious with Personal Information
Never share personal information like your Social Security number, tax ID, or bank details via phone, email, or social media unless you are absolutely certain about the recipient’s identity. Scammers often pose as the IRS or other tax agencies, but remember, the IRS will never initiate contact through email, text, or social media for your personal information.

2. Use Strong, Secure Passwords
Always use strong passwords for online accounts, especially for tax-related websites, banking, and financial platforms. Enable two-factor authentication (2FA) wherever possible to add an extra layer of security to your accounts.

3. File Early
Filing your taxes as early as possible can prevent fraudsters from submitting a false return in your name. Once your legitimate return is filed, fraudulent returns are automatically rejected by the IRS.

4. Watch Out for Phishing Scams
Be wary of emails, texts, or calls claiming to be from the IRS that ask for immediate payment or personal details. The IRS will never demand payment without giving you the opportunity to appeal or review your tax bill, and they do not request payments via gift cards or wire transfers.

5. Monitor Your Credit and Bank Accounts
Regularly monitor your credit reports and financial accounts for any suspicious activity. Unauthorized charges, changes to your personal information, or new credit accounts you didn’t open could indicate identity theft.

6. Use Secure Networks
When accessing tax documents or filing your return online, ensure you’re using a secure internet connection. Avoid public Wi-Fi networks for any sensitive transactions, and use a Virtual Private Network (VPN) for an added layer of encryption.

7. Check for IRS E-File and Software Security
If you file your taxes online, make sure you’re using reputable tax preparation software or services that are approved by the IRS. Look for encrypted websites and secure payment gateways to protect your personal data.

8. Review Your Tax Transcripts
Periodically check your IRS tax transcripts to verify there are no fraudulent filings under your Social Security number. This can help detect fraud early and allow you to take immediate action.

9. Report Suspicious Activity
If you believe you’ve been a victim of tax fraud or identity theft, contact the IRS immediately. You can file IRS Form 14039, Identity Theft Affidavit, to notify them of suspicious activity. Also, consider reporting the fraud to the Federal Trade Commission (FTC).
By following these steps, you can significantly reduce the risk of tax fraud and protect your personal information. Stay vigilant and proactive during tax season to keep your data secure.