ID THeft & Taxes: It Pays to FIle Early

Vincenza Vicari-Bentley, AFC
​Empowering Financial Wellness Program Coordinator

If you’re anything like me, I am the ultimate procrastinator when it comes to filing my tax returns. But believe it or not theft in the time of tax returns is a lot more common than you might think and being a procrastinator isn’t best in this situation. Most people don’t know that they’ve been exposed to this type of theft until their tax return is denied. There are criminals out there that attempt to steal identities by filing false returns using your Social Security number. According to the IRS, in 2019, there were about 60,000 fraudulent tax returns filed and those returns were worth millions…….. $345.5 to be precise.  While the IRS was able to prevent about 93% of those, there were still about $24 million worth of returns outstanding. Keep in mind that these statistics are only related to actual tax filings. So how can you protect yourself from scams at tax time? How can it pay to file early?

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Here are some tips and types of scams to be aware of:  

• The IRS is really old school about communication and they like to use good old snail mail for their communication—their first communication will never be by phone and you won’t ever receive an unsolicited email, text, or social media message from the IRS. 
• Scammers use scare tactics and demand upfront, over the phone, or email payments. The IRS does NOT do that. One of the latest twists of a scam related to Social Security Numbers is that the scammers claim to be able to suspend or cancel the victim’s SSN. This attempt by criminals is intended to frighten people into returning “robocall” voicemails. The callers can even alter the caller ID to make it look like the IRS is calling!
• Phishing (as in “fishing for information”) is a scam where scammers send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity. 
• The IRS won’t ever specify how a payment should be made like a prepaid debit card,gift card or a wire transfer. Generally, the IRS will first mail you a bill if you owe any taxes.
• The IRS won’t threaten to bring in law enforcement for unpaid bills but scammers might.
• For the first time this year, the IRS is allowing all taxpayers to establish Identity Protection Pins, codes that can be used to verify identity before you file your taxes. Previously, this protection was only available to victims of identity theft. Read more about it on the IRS website. https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin.
  
• Even after this years' April filing deadline will have passed, scammers remain hard at work, and the IRS urges taxpayers to be on the lookout for a spring surge of evolving phishing emails and phone scams.

When in doubt and if you ever receive unsolicited texts, emails or phone calls from someone claiming to be the IRS, you should contact the IRS directly. Visit their website at www.irs.gov for accurate contact information.
How can filing your taxes as soon as possible help you avoid theft? Filing early limits the window for scammers to use your Social Security number. While it’s always a good idea to protect your identity all year long, it’s especially important during tax season. Filing your taxes early doesn’t completely eliminate the possibility of identity theft but it does help protect your refund.  Filing your taxes as early as possible also means that you can focus on other tasks that put you on the path to building financial security and peace of mind. For more tips, tricks and hacks for your personal finances visit www.finance.usu.edu/efw