(From Fox Business) You aren’t the only one anxiously awaiting your tax refund.
Tax refund theft is a growing problem as scam artists find new and creative ways to steal your identity and money.
According to the Federal Trade Commission, identity theft was the top consumer complaint for 2013, and one-third of those complaints were related to tax fraud or wage-related matters.
What’s more, according to Rip Mason, chief executive of LegalShield, the majority of complaints concerning identity theft come from those ages 20-29.
“There’s a lot of speculation on why it’s happening to that age group,” says Mason. “They are very fast on the Internet, are comfortable responding to email and frankly, they are not terribly exposed to the issue of identity theft.”
Identity theft has become such a big problem that Mason says the government has assigned thousands of employees to work on identity-theft related matters and instituted new detection and prevention procedures.
But despite the efforts, the number of tax refund thefts is still continuing to grow. “Last year, the IRS caught a little over one million fraudulent tax returns,” notes Phil Zaman, director in the national tax office at CBIZ MHM, a financial services company. “There’s another one million they didn’t catch.”
No matter your age, there are steps to protect your identity and tax refund—but the first step is understanding the scams.
While there are different variants, at the center of each scam is getting unauthorized access to your Social Security number. The scammers use many techniques, including phishing emails and fake emails and phone call from people claiming to be from the IRS.
Once they have your information, thieves will create a fake tax return with a W2 and withholdings and request the tax refund be directly deposited into a bank account or request a pre-paid debit card from the IRS be mailed to their address. The banking account will be closed or the debit card will be cashed out right away–usually before your or the IRS catches on.
Victims learn of the scam when they try to file their legitimate tax return and it get rejected for already being filed. Getting the refund that is rightfully yours can take six months or more to be sorted out at the IRS, experts say.
Your internet activity is a prevalent way for criminals to get ahold of your Social Security number, but it’s not the only way. Thieves can get access to your identifying information from stealing your wallet or purse and even looking through your trash.
Just this month, the IRS warned taxpayers on its website about a new email phishing scam that claims to be from the IRS Taxpayer Advocate Service telling you of a processing error with your 2013 tax return. The email directs you to click on links for information about the so-called advocate assigned to your case. The links, however, lead to non-IRS web pages that are trying to get personal information out of you.
While no defense is a 100% foolproof, experts say being stingy with who you share your Social Security number can go a long way in protecting yourself. “Don’t carry [your card] around and don’t give it out at businesses unless it’s for something like tax reporting,” says Zaman. “A lot of medical offices ask for it…you’re not legally obligated to give it.”
Consumers also have to be smart about how they use the Internet: don’t click on unfamiliar links, open emails from unknown senders or imput personal information on unsafe websites.
Using a paper shredder for documents with personal information will ensure crooks can’t find your data while sifting through your garbage. It also means being skeptical if you get a call or email from someone purporting to be from the IRS. Remember: the IRS will never initiate contact with taxpayers via email, social media or phone.
“Ultimately, it is individual taxpayers who are the best defense against tax refund theft,” says Mason. “The best way to prevent theft of your tax refund is to prevent theft of your ID in the first place. Without personal information such as your Social Security Number, it is very difficult for thieves to steal your tax refund.”
For additional information click on this link or go to: www.legalshieldassociate.com/sheilazarle