7 Ways to Avoid Tax Identity Theft and Protect Your Personal Information

You're careful when it comes to your identity. Bank and credit card statements are always shredded, you cover your hand when entering your PIN and you never give personal information over the phone. But do you take extra precautions to protect your identity when you file your taxes?

Identity theft and taxes may not seem like they go hand in hand, but tax fraud is among the top five forms of identity theft, according to the Insurance Information Institute. If tax identity theft isn’t on your radar, it should be. Perhaps you’re wondering how tax identity theft can happen? Read on for seven tips from Farm Bureau’s identity protection provider CyberScout^®, which can provide tax identity theft protection. 

1. File Early to Prevent Tax Identity Theft

Filing early is the first line of defense to prevent tax identity theft. Identity thieves try to file a fraudulent return on behalf of a taxpayer using a stolen Social Security card in their name. The IRS will always flag a second return as suspicious, so filing your tax return early increases the likelihood the fake return will be flagged. Stay ahead of the game by gathering and preparing your documents while you wait for your W-2 or client paperwork.

2. Go Electronic to Receive Your Tax Refund

Opt for direct deposit of tax refunds. This will help you avoid lost or stolen refund checks. 

3. Choose Tax Preparers Carefully

Many fraud rings front as tax preparation companies that may steal Social Security cards and personal information or redirect your return. Before you hire a tax preparer, get a recommendation from a friend and scour online reviews to ensure they follow federal tax regulations. 

4. Secure Your Personal & Tax Related Identity Information

Store all of your tax-related documents, including credit reports and Social Security cards, on a password-protected or encrypted external drive. Keep physical copies in a secure location and shred financial documents once you are done filing your taxes.

5. Never Respond to Unsolicited Requests for Personal Information

The IRS never communicates via unsolicited email, text message or phone call. If they need to reach you, they will send you a letter in the mail. Any suspicious emails, texts or calls are likely from identity thieves operating IRS tax scams. Forward any suspicious emails to phishing@irs.gov. 

6. Keep Your Social Security Number Private

Someone who has your Social Security number can steal your identity and commit tax identity theft. So, store your Social Security card in a secure place at home, such as a safe or lockbox. Do not carry it around with you. Also, only provide your Social Security number to others when it is absolutely required.

7. Use Strong Passwords & Online Security

Tax identity thieves can try to steal your personal information online. To safeguard your personal information online, create strong passwords for each of your accounts rather than reusing the same passwords across websites, and change your passwords frequently. Consider using a password manager such as 1Password or Dashlane to create and store your passwords for added identity theft protection.

Furthermore, a stolen device makes you susceptible to identity theft. Do not enable your devices to save your passwords, as automatic logins leave you more vulnerable to attacks by prospective identity thieves. Additionally, protect your computer from spam, viruses and malware attacks by investing in antivirus software and a firewall, as well as avoiding unsecured sites.

You’re a Victim of Tax Identity Theft — What Now?

A notice alerting you a return was already filed indicates a third party filed in your name. Likewise, an alert indicating unreported wages indicates a third party is using your name and Social Security number. Either alert is a sign you could be the victim of tax return identity theft.

If a tax return was filed fraudulently on your behalf, you should:

1. Submit an Identity Theft Affidavit using irs.gov Form 14039.
2. Continue to file your tax return (use a paper form if your electronic submission was rejected and attach the Identity Theft Affidavit).
3. Place a fraud alert with at least one of the three main credit bureaus (Experian, TransUnion and Equifax).
4. Use credit monitoring and identity theft protection services to keep an eye out for other signs of fraud.

Protect Yourself From Fraud

Stay ahead of tax identity theft and other forms of identity theft with identity protection services from Farm Bureau. Connect with your local Farm Bureau agent to find out how you can add this protection to your policy for an affordable cost.