Preventing Tax Identity Theft – Downeast Credit Union

Preventing Tax Identity Theft

Posted on May 9, 2024 | Fraud Defense
Tax identity theft, which is the filing of fake tax returns using stolen identities, is a form of tax fraud that affects hundreds of thousands of taxpayers every year according to the Maine Credit Union League. Unfortunately, identity thieves aren’t filing tax returns in their victims’ names to help them through the tax-filing process. Instead, they are after their victims’ tax refunds. Knowing what steps individuals can take to prevent tax identity theft can help ensure they receive their refund––if they anticipate getting one. Here are some ways people can reduce their risk:
File Returns as Soon as Possible: The earlier someone files their tax returns, the less likely they’ll fall victim to tax refund theft. If an individual files their return, any further attempts to file in their name will be automatically denied.
Keep Personal Identifying Information Private: In order for an identity thief to file a fraudulent return, they would need to have their victim’s personal identifying information. Identity thieves can inflict a lot of financial harm with a lost or stolen wallet, mail, or documents that are thrown away. To limit the chances of identity theft, it’s important for people to safeguard important documents at home, such as their Social Security card, birth certificate, passport, financial statements, and tax documents. Keeping information safe in the digital world is equally as important, too. To protect their information, people should use multi-factor authentication on all their accounts, create strong passwords, and update their software regularly.
Choose a Trusted Tax Preparer: Before someone chooses a tax preparer or online tax filing service, they should do their homework to ensure they are a trustworthy resource. People should look up customer reviews or ask for references––that way it increases the odds that the person or service is legitimate and will keep their data secure.
Be Aware of Phishing Attempts: Scammers use email, fake social media accounts, and other forms of online communication tools to try and steal passwords, account numbers, Social Security numbers, and more. With that information, they can gain access to peoples’ accounts, sell their information to other scammers, and file fraudulent tax returns in their name. To protect themselves, people should enable email spam filters, ignore friend or follow requests from users they are not familiar with, and keep an eye out for anything that looks suspicious. People shouldn’t click on suspicious-looking links or open any unexpected attachments.
Whether or not you’re expecting a return, following these tips can help prevent your identity from being stolen. Your personal identifying information is one of the most valuable resources to a fraudster, so practicing good habits and taking the proper steps can lower your chances of experiencing financial headaches down the road.