Tax season is upon us and if you’re expecting a refund this year, there are key things you need to know to ensure your money doesn’t end up in the wrong hands.
What’s worse than doing your taxes? How about finding out someone already submitted a return in your name and stole your refund?
“Tax-related identity theft occurs when someone uses a stolen Social Security number to claim a refund and file a fraudulent tax return,” said Grace McKnight with the Internal Revenue Service.
The IRS says thieves often will request the refund electronically, which can easily be deposited into an account.
The Better Business Bureau says tax-related identity theft often happens when people get careless safeguarding their personal information.
“We’ve had instances of people posting things online. We’re all familiar with someone being proud of their son or daughter and they post their W-2 online,” said Tim Caminos with the Hawaii Better Business Bureau.
Last year, the IRS opened more than a thousand tax identity theft investigations and prosecuted over 700 people nationwide.
“Last year, unfortunately, we had a consumer who had this. It was later in the tax season, (he) had gone to file his return and he was notified that it was already sent in,” McKnight said.
There are some things you can do to help spot or prevent yourself from becoming a victim. First, it’s a good idea to file your taxes early, since many schemers try and get a head start on taxpayers. Second, safeguard your Social Security number.
“When you’re dealing with someone’s identity, it’s very dangerous because not only then is it tax-related but it’s basically related to your whole life,” Caminos said.
If you file by paper, make sure you drop your return in a secure mailbox. If you file online, make sure it’s from a secure network.
If you have questions or think you’re a victim of tax-related identity theft, visit the Federal Trade Commission’s website.