Protect Yourself from Tax-Related Identity Theft This Tax Season

| March 3, 2016

Stacy Bush, Valdosta Today Financial Contributor

Stacy_Headshot (1)Our column, “The Bush Wealth Advantage” is our way of giving back to the community with all sorts of insights, relevant news, and practical wealth planning strategies.

Protect Yourself from Tax-Related Identity Theft This Tax Season

Tax season is underway and that means an uptick in tax-related scams. One particularly pernicious form of fraud is tax identity theft. Tax-related identity theft happens when someone uses sensitive personal information (like your Social Security number) and files a fraudulent tax return in your name to collect a refund. According to recent statistics, scammers filed over 5 million returns in 2013 using stolen information, costing the IRS $5.8 billion in fraudulent refunds.

Unfortunately, filing a false tax return isn’t difficult. All you need is a name, Social Security number (SSN), and date of birth (usually stolen from sources outside the IRS). Most victims don’t realize anything is amiss until they file their taxes and receive notification that a return has already been filed in their name. Fortunately, there are some common-sense steps you can take to protect yourself from identity theft.

How to Protect Yourself from Identity Theft

  • Remember that scams involving people impersonating the IRS are on the rise, especially this time of year. The IRS never asks for personal information by phone, email, text, or social media or threatens arrest for nonpayment. IRS notices will always arrive by mail, and anyone demanding immediate payment over the phone is a scammer. If you receive an unsolicited call and think you might owe federal taxes, hang up and call the IRS directly at 1-800-829-1040.
  • Be careful about giving out your SSN since it is the most commonly used piece of data to commit identity theft. If you are filling out paperwork that asks for your SSN, confirm whether it is actually necessary and ask about security precautions.
  • Never give out information in response to unsolicited calls, emails, letters, or social media messages. Don’t click on links in emails purporting to be from the IRS or a financial institution or enter information into any website linked from that email. Always visit official websites directly and call an official number to verify the legitimacy of any request.
  • Follow smart computer practices like creating strong, unique passwords for each account and website you use. Purchase anti-virus and firewall software for your computer and install regular updates. When you discard an old computer, get an expert
    to wipe the hard drive and remove all of your private data.
  • Regularly shred documents like bills and financial statements, tax returns older than seven years, old checkbooks, receipts, credit card offers, paycheck stubs, insurance statements, expired credit cards, and any other paperwork that contains account numbers or personal information. A lot of identity theft happens when thieves gain access to confidential data in your trash, car, or house.

How We Can Help

One of the benefits of having a financial professional in your corner is that you don’t have to fight financial fraud alone. Incidences of identity theft and tax-related fraud are on the rise, and we’re here to help our clients protect themselves. If you have questions about identity theft or tax-related scams, please contact our office at (229) 247-1474.

Stacy Bush has practiced independent financial advising in the Valdosta area for 14 years. Growing up on a farm in Donalsonville, Georgia, he is keen to the financial needs of South Georgia and North Florida families. Stacy and his wife, Carla, live in Valdosta with their four children. You can submit questions about this article to askstacybush@lpl.com

Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. The opinion voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Bush Wealth Management

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