The No. 1 Thing You Can Do to Prevent Tax Identity Theft

Are you counting on your tax refund check to take a family vacation, pay off your credit card, or do something else equally important? Then you’d better read on. In this blog post, I will discuss the No. 1 piece of advice officials and experts alike have regarding how to stay safe from tax identity theft this year.

While no one knows exactly what impact the Equifax data breach, which affected more than 145 million people, will have on the 2018 tax season yet, we do know that criminals have the information needed to file fraudulent tax returns and steal your refund.  And it’s important to note that a credit freeze will not prevent tax return fraud, and monitoring your credit will not alert you to the issue, either.

First, a little background on tax identity theft. “Tax identity theft happens when someone uses your Social Security number (SSN) to get a tax refund or a job,” according to this Federal Trade Commission blog post. “You might find out it’s happened when you e-file your tax return and discover that a return already has been filed using your SSN. Or, the IRS may send you a letter saying more than one return was filed in your name, or that IRS records show you have wages from an employer you don’t know.”

The problem is widespread. Back in 2016, it was the largest and fastest growing ID theft category tracked by the Federal Trade Commission.

So What’s The 1 Thing You Can Do To Prevent Tax Identity Theft?

Steve Weisman, a lawyer and an expert on scams and identity theft writes it best in this USA Today story he penned:

When it comes to income tax identity theft, the best place to look for a helping hand is at the end of your own arm. You can only become a victim of income tax identity theft if the criminal files an income tax return using your Social Security number before you do so the best way to prevent that is to file your income tax return as early as possible.”

Eva Velasquez, the CEO and president of the Identity Theft Resource Center, agrees, saying “Our motto is, file first and beat the crooks.”

Additionally, if you use online tax preparation services, you should pick a strong password and don’t use a password you’ve used at any other site or service. For the latest advice on how to create strong passwords, see our blog post.

In honor of Tax Identity Theft Awareness Week, slated for Jan. 29-Feb. 2, 2018 , we are doing a series of posts about tax identity theft — including this post as well as “4 Signs to Watch For That Could Indicate You’re a Tax Identity Theft Victim.” Read our related post “IRS-Related Scams You Should Watch Out For This Tax Season” for more information about how to stay safe this tax season.

While filing your tax return early might stave off tax identity theft, it’s still no guarantee. And if you do become an identity theft victim, there are a slew of time-consuming steps you must take to fix the damage. In short, it’s a nightmare, take it from user Michelle, who posted her story in this comment on this Krebs On Security post about tax identity theft.  “We were just victims AGAIN of tax fraud two years in a row. I called IRS and their attitude was IT HAPPENS SO SORRY MOVE ON. Again we are going to have to wait 180 days to see ANY REFUND and this is after I will spend HOURS UPON HOURS filling out forms etc and MAILING them in to the IRS. This is a nightmare”

That’s why we recommend signing up for a identity theft restoration membership. That way no matter how your identity is stolen, you’ll be covered. If you’re a LibertyID member and your identity is stolen, a certified identity restoration specialist will mark each step off the list and restore your identity to pre-theft status, saving you hours of waiting on the phone for the IRS and the frustration of trying to wade through the detailed steps required to resolve tax identity theft.

The bottom line is identity theft happens all the time, but what if it happens to you? Sign up for an annual LibertyID membership and you won’t have to worry about it.

Image: Pexels

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