The Federal Trade Commission estimates that 9 million Americans are victims of identity theft each year. Identity theft occurs when criminals gain unauthorized access to your name, Social Security Number (SSN), or bank account information. Once they gain access to this personal information, they use it to commit fraud or other crimes.
Here’s a deep dive into how it happens and ways to avoid it.
How Does Identity Theft Happen?
There are several ways criminals gain access to personal information, including:
Rummaging Through Your Trash
People tend to throw away old bills and financial statements that have personally-identifying information, including address, account number, bank name, and more. Identity thieves may be able to put together enough information to open new accounts in your name or even assume your identity. If you do throw away critical financial documents, make sure to shred them first.
Stealing Your Mail
Criminals may go through your mail to look for pre-approved credit card offers. They’ll take advantage of this offer by opening an account under your name and quickly racking up credit card debt.
Attempting Phishing Scams
Phishing scams are another common way for thieves to gain specific information. They deceive unsuspecting consumers by pretending to be financial institutions and conning them to open or respond to emails designed to capture personal information for fraudulent schemes.
Stealing the Old Fashioned Way
Criminals who are less technologically advanced may steal wallets or purses to obtain identification and credit cards.
Warning Signs of Identity Theft
You may not know you’re a victim of identity theft until the IRS notifies you of an issue with your tax return. Here are some signs that someone has filed a fraudulent tax return:
- The IRS sends you a letter about a suspicious tax return.
- Your e-filed tax return is denied because of a duplicate Social Security number.
- You get a tax transcript in the mail that you didn’t request.
- Records show that you received income from an employer you never worked for.
It’s important to note that the IRS NEVER initiates contact with taxpayers by email, text, or social media to request personal or financial information. Plus, the IRS NEVER calls taxpayers with threats of lawsuits or to request taxpayers’ Identity Protection PINs.
How to Prevent Tax Refund Theft
File as soon as possible.
Once you receive all of your tax forms required to file, don’t waste any time completing your tax return. Since the IRS allows only one tax return per Social Security number per year, filing early is the best way to prevent tax identity theft.
Keep your information secure online.
Keep all of your data secure by creating passwords that are impossible to crack. To keep track of all your passwords, use a secure password manager like LastPass.
Spot phishing attempts.
Be diligent about spotting phishing attacks in your emails and text messages. If a company is asking you to provide sensitive information or adding suspicious links or attachments, beware. Don’t give out personal information or click on links, even if the email seems to be from a legitimate organization.
Keep important documents secure.
Store important documents, such as your Social Security card and birth certificate, in a safety deposit box at your bank.
Sign Up for Credit Monitoring
Credit monitoring services notify you within 24 hours of any change to your credit report, including credit card or loan applications under your name.
What to Do if You Think Someone Stole Your Tax Refund
If you believe a criminal has stolen your identity, call the IRS Identity Protection Specialized Unit right away at 800-908-4490. Here are the next steps to take if you’re a victim of tax identity theft:
- Contact the Federal Trade Commission (FTC)
- File a paper return
- Consider freezing your credit
- Check your open accounts
- Request an identity protection PIN
Work With a Tax Expert
As seasoned tax attorneys and lawyers, we can help find a solution for any tax-related identity theft issues you may be facing. We’ll work with the IRS to detect, prevent, and deter tax-related identity theft and fraud.
Contact US Tax Shield today at (877) 829-3535 for your free, no obligation consultation.
