Change is sneaky… and (often) sudden, catching the best of us off guard and forcing us to scramble for some steady ground. Just consider the war in Ukraine.
We’ve all been surprised by how quickly things have escalated in the last two weeks and by the devastation we’re seeing. And millions in Ukraine have found their lives shifting so suddenly as they flee to find safety from the Russian onslaught (our thoughts go out to them).
Tragedy just STRIKES without warning so often. And the suddenness can be difficult to prepare for.
But this is what good planning is for. This is why we prepare our San Diego houses for the storms to come.
One of those unexpected storms (that I’ve seen once or thrice among my clients) is tax identity theft. And it will have you reeling. But before I get more into that…
Only 5 weeks left of the tax season. A little more than a month and tax day will be here. If you haven’t set up your appointment, you’re gonna want to schedule it ASAP. Even now, we’re waist-deep in returns… but we can still help you.
858-549-9666
And as you are getting ready to file those taxes, we want to make sure you’re on alert about the various tax identity theft scams out there. It’s so easy to become a victim and sometimes you don’t even know until months away when it’s much harder to manage it.
So, let’s talk about how to be on the lookout for tax identity theft and ways you can protect yourself from it…
Tax Identity Theft Protection Tips for San Diego Taxpayers
“It’s not what you are that counts, it’s what they think you are.” – Andy Warhol
You’re minding your own business when you get an IRS letter about a tax return that in fact you never filed. Or you file your tax return and it bounces back because of a duplicate Social Security number (SSN). Or the IRS lets you know that, yep, that online account you never asked for has been created in your name …
You may be the victim of tax identity theft.
It’s nothing personal: This theft remains rampant – year after year tax-related ID theft makes the annual IRS “Dirty Dozen” tax scams. Crooks use this scam to steal tax refunds (to start).
Except this is personal. It can make you feel violated and cost a lot of sleep and worry.
You are not helpless. The earlier you spot the crooks’ tax-related activities the better. Here’s what to look for – and how to fight back fast.
Signs of trouble
You might think the IRS isn’t always on your side (and you’d be right …) but they are in this case. They don’t want somebody using your info to steal a tax refund any more than you do.
The first thing the IRS does is give you additional common warning signs:
- You get a tax transcript in the mail that you didn’t ask for.
- You get an IRS notice that you owe more tax or that collection actions are looming for a year when you didn’t even file a tax return.
- Records say you got income from an employer you didn’t work for.
Signs of tax identity theft can show up way beyond your taxes, too. Have you been part of a data breach lately? Anything funny happening with your credit report or your bank account? (And size doesn’t matter: Cybercrooks often test an account with little charges to see if it’s vulnerable.)
These days scammers are likely to try to rip you off with a call, email, or text – the term is “phishing.” Scam emails will often look a lot like they’re from a legit organization like a company or tax authority (watch for spelling and grammatical mistakes). Phone crooks will often pose as the IRS or a bank, threatening you with legal action or arrest if you don’t fork over your financial details.
The IRS emphatically says they never initiate contact with you via email, text message, or social media message, only by snail mail. The IRS also advises you (big surprise) that if you think you’re a victim of ID theft, continue to pay your taxes and file your tax return, even if it has to be a paper one.
Protecting yourself from tax identity theft
There are lots of ID-theft shields online, many of them free, and your computer probably has a firewall built in. They’re effective to varying degrees but they go out of date fast. Common sense is another first defense. Keep an eye on your accounts and credit reports; the big three credit services are Equifax, Experian, and TransUnion.
Regarding tax-related theft, the IRS has responses for different situations:
- Compromised Social Security number: Respond right away to any IRS notice about this. Call the number provided.
- An E-filed return is rejected because of a duplicate SSN: Fill out IRS Form 14039, “Identity Theft Affidavit,” print it and attach it to your return and mail your return according to instructions. You can also get a copy of any phony returns.
- A dependent on your return has been claimed on another return: You need to get to the bottom of this, and you can do that here. Also, do this if the IRS sends you a CP87A Notice.
- If you previously contacted the IRS and didn’t get resolution: Call (800) 908-4490 for special assistance.
Of course, we’re ready to help with all of these.
The IRS can also give you an Identity Protection personal identification number (IP PIN) that keeps someone else from filing a return using your ID. If you’re what the IRS calls “a confirmed victim” of tax-related ID theft and the case has been resolved, the IRS will mail you a new IP PIN each year. You have to pass a “rigorous” ID verification. (Glad somebody does …)
And remember the chestnuts for ID protection:
- Build passwords with long phrases (that you can remember) that combine characters and numbers. Give each account its own password and don’t use your email address as your login ID.
- Multi-factor authentication is weathering the test of time as another layer of armor. You get a security code texted to your phone; on the site you want to access, you enter the code along with your username and password to log in.
Though there are a lot of things to stress about in the world right now, tax time doesn’t have to have to be one of them. We’re here to help you now and the rest of the year, too.
Reach out if you want to talk more about identity protection, tax filing, or anything tax-related.
We’re happy to be your port in the storm – a reliable San Diego tax advisor you can trust.
In your corner,
Darryl A. Hale, EA, MBA, MST