Identity Theft Tips

Identity Theft while Filing Taxes

In This Article
  • Securely store tax documents and copies of your returns at home
  • On the way to the accountant, don't leave tax forms unattended in your car
  • Don't use a mailbox accessible by thieves to send in your returns

Tax time, whether it’s in April, June, October or December, often puts important personal identifying information at risk for exposure. Your W-2s, and other IRS reporting forms, include your Social Security number and, in some cases, financial account information. These numbers can be a gold mine for identity thieves. Your personal information can enable a thief to obtain a job, open up new lines of credit, access existing financial accounts or stock portfolios, get welfare, avoid a criminal history and generally create havoc in your life.

The question is: where are those forms kept in your home? Are they lying on a tabletop or somewhere anyone can see them? Or, are they in a locked box or file cabinet? Many consumers are not aware of the potential threat that these forms represent and take little notice of the necessary steps that should be taken to secure these items.

Here are some tips on how to minimize the risk of identity theft:

Paper Security

Whether in the home or in the office, make sure all tax documents and paperwork are secured in a safe, locked location at all times. Any financial statement or item with personal identifying information should not be left unsecured or visible to others.

Data on the Move

Financial documents don’t belong in a briefcase left unattended in your car. Law enforcement has reported increases in vehicle break-ins to steal items that can be used to commit identity theft. When transferring tax documents between home and the accountant, make sure they are hidden from view, i.e. locked in the trunk, at all times. Computer Security

Computer Security

If your computer is linked to the Internet, be sure to regularly update firewall, anti-virus, and anti-spyware software to protect you from attack. Since many taxpayers now file online or store financial information on their computers, it is vitally important to install and update these types of security programs. Sensitive documents should be kept on a computer with a password protected log on. This computer should never be used by children or others who might install peer-to-peer software (Kazaa or Limewire) or expose the computer to unrestricted Web browsing. These activities often result in security problems within days, if not hours.

E-Filing

While preparing your tax return for filing, make sure to use a strong password to protect the data file. Once your return has been e-filed, burn the file to a CD or flash drive and remove the personal information from your hard drive. Store the CD or flash drive in a lock box or safe. If working with an accountant, you should query them on what measures they take to protect your information.

Mail Theft Awareness

Be sure to retrieve your mail every day. An unlocked mailbox is an open invitation to an identity thief to steal your tax refund or other important documents. When mailing your tax documents, take them directly to the Post Office. Drop them in a box inside the Post Office. If you must use an outside Post Office pickup box, it’s best to drop your mail before the last pick-up of the day. Don’t leave tax documents in an outgoing mailbox at work.

Tax Preparers and Personal Privacy

Be selective about who works on your taxes. Investigate tax preparation companies with the Better Business Bureau, especially new or seasonal offices. Ask the preparer how your information will be stored. Will it be encrypted? What computer security software is used? Who has access to this information? Has the person working on your taxes undergone a thorough background screening? How many years have they worked for the company? Do you see personal papers displayed on desks? Trust your impressions. If you feel uncomfortable or doubt the firm’s commitment to protecting your privacy, take your business elsewhere.

The phrase “buyer beware” especially applies to “online tax preparers.” Who are these people? What do you know about them? Are they really a company or legitimate accountant or is it a scam to gather Social Security and account information from you?

Avoid doing financial business in supermarkets or other public concession booths, where others may hear or see your transaction. Those mini offices are not soundproof, and criminals have been observed using binoculars or shoulder surfing to gather information. Go some place where you have privacy.

Tax Time Scams

If you receive an email asking for your Social Security number or financial information, delete it or send it to the FTC at spam@uce.gov for investigation. The IRS does not send emails stating you are being electronically audited or that you are getting a refund. If you have any questions about an email you received from the IRS or a letter that sounds suspicious, immediately call the IRS Taxpayers Advocates at 1-877-777-4778.

Document Disposal

Put papers you no longer need through a cross-cut shredder. These include credit card receipts, other papers with Social Security numbers (i.e. income reporting forms), financial statements, health benefit statements and loan documents. Do not store these documents intending to shred them at some future time. As soon as you determine the document is no longer needed, shred it.

Document Storage

When storing your tax returns and other sensitive financial documents, use a locking file cabinet or, even better, a safe. Make sure you know who else has access to this storage.

Employment Identity Theft

Identity theft goes beyond the well-known forms of financial identity theft. Sometimes identity thieves use your identity to get a job, obtain welfare, or medical services. They may be employed and using your Social Security number or even your child’s Social Security number. In these situations, the IRS may send a notice indicating that more than one person is using a Social Security number or that you owe taxes. If this happens, immediately contact the IRS Taxpayer Advocates at 1-877-777-4778 or the Identity Theft Resource Center at 1-888-400-5530.

Copyright © 2011, Identity Theft Resource Center®. All rights reserved. Any requests to reproduce this material, other than by individual victims for their own use, should be directed to ITRC@idtheftcenter.org. This fact sheet should not be used in lieu of legal advice. This article is referenced as "Solution 24: Tax Time Tips" on the Identity Theft Resources Center website.