Unfortunately, identity theft is on the rise. According to a 2017 Identity Fraud Study conducted by Javelin Strategy and Research, 15.4 million Americans have fallen victim to identity thieves in 2016. This was up 16% from 2015.
Although credit card companies as well as the IRS have taken steps to prevent identity theft, there are some steps that you can take as well.
- Protect Personal and Financial Records
Do not carry your social security card in your wallet, or any other card that has your social security number on it. Only provide your social security number when absolutely necessary. Do not say your social security number out loud. If you must provide it to someone, write it down and retrieve the paper for shredding. Routinely change passwords for online accounts. Do not use personal data in your passwords. Do not use the last four digits of your social security number as a pin number. Do not toss pre-approved credit offers in your trash or recycling bin without first tearing in to very small pieces or shredding. The same should be done with other sensitive information. Install and update virus and malware protection software on your personal computers.
- Watch out for Scams
Thieves will often try to impersonate the IRS, credit card companies as well as banks. If you have any concerns about the legitimacy of a phone call or email, do not provide any personal information. The IRS will not call a taxpayer threatening a lawsuit, arrest or demand immediate payment over the phone. The IRS will not contact you via email, although thieves may use the emblems of both the IRS and the FBI in their e-mails.
If you become aware that your personal data has been compromised, several steps can be taken. IRS Form 14039, Identity Theft Affidavit, can be completed. Once completed, the IRS will then mark your account with a fraud alert. You should then receive a letter from the IRS inviting you to opt-in to get an Identity Protection Pin (IP PIN). Once you opt-in to get an IP PIN, a new IP PIN will be issued every year (in late December or early January). This pin number must be on your tax return in order for your tax return to be filed electronically. If an identity thief has your personal information, they will not be able to electronically file a false tax return without this six digit pin number. You should also contact one of the three credit bureaus to place a fraud alert or credit freeze on your account, as well as contacting your financial institutions to report the identity theft.
Should you have any concerns about identity theft issues please feel free to contact us.
Brooke Carroll, CPA