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Protect Yourself and Your Parents from Tax Fraud

Protect Yourself and Your Parents from Tax Fraud

  • 03.14.19
  • Planning & Retirement
  • Article

Keep an eye out for warning signs and reduce your vulnerability with a few simple tips.

A disturbing trend may be endangering the financial security of you and your parents: Identity thieves are stealing other people’s personal information and using it to file tax returns. These criminals file fraudulent returns, hoping that IRS processing weaknesses will prevent them from being identified before they receive a refund. These scammers are stealing money from the government while also hindering your ability to file a genuine tax return and receive a refund – not to mention creating undue stress as you take efforts to rectify the situation. It’s important to be aware of this scheme and take steps to prevent this from happening to you and your loved ones.

Identity thieves often file fraudulent tax returns as early as possible in an effort to have the bogus return processed before you can file your own legitimate return. You may therefore be unaware you’ve been victimized – until you attempt to file your taxes.

Warning Signs

It’s important to be on the lookout for IRS notices that appear to be inaccurate. Warning signs may include notices indicating that more than one tax return was filed with your Social Security number, you owe an additional tax that appears to be inappropriate or records show you have received wages from an unknown employer. These warnings may indicate that you or your parents may have been defrauded in a tax scheme.

Prevention Tips

There are several ways to reduce your family’s chances of becoming a victim of tax return identity fraud:

  • Keep your Social Security number, as well as other personal information, stored in a secure place (i.e., not your wallet), and avoid mentioning it on the phone or online unless absolutely necessary
  • Consider installing extra security on your computer
  • Be sure to check your credit report and Social Security Administration earnings regularly, looking for anything suspicious or irregular
  • Be aware that the IRS does not routinely email, make phone calls or communicate through social media. Any communication from those sources is likely to be fraudulent and should immediately be reported to phishing@irs.gov.
  • Assume that unexpected calls from the IRS urging you to give or confirm financial information are fraudulent and should be reported to treasury.gov/tigta/contact_report_scam.shtml.

Consider an IP PIN

In some instances, you may be eligible for a number called an Identity Protection PIN (IP PIN). An IP PIN is a six-digit number given to qualified taxpayers to help prevent the filing of false tax returns. Once a taxpayer obtains his or her unique IP PIN, all of his or her tax returns must be filed using this number, which can help ensure that no other fraudulent returns are filed. Please note that this PIN is different than the four-digit e-file signature PIN, which is used for filing online returns.

If you are interested in obtaining an IP PIN, you can register your PIN by following the steps at irs.gov/Individuals/Get-An-Identity-Protection-PIN.

For more information on IRS tax return fraud and prevention methods, visit irs.gov.

This content was created by EverSafe. Raymond James is not affiliated with EverSafe.

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