Protect Yourself Against Tax Scams

prevent-tax-scamsIt may be a new tax filing year but tax scammers are still up to the same old tricks. There are things you can do to help keep your personal and financial information safe.

The IRS has started an initiative to increase security and reduce identity theft called, “Taxes. Security. Together.” For example, if you use TurboTax®, Tax Slayer® or similar software, in addition to registering the device with the software company, you will also be able to select a unique login code along with an ID and password.

There will be less time for you to remain logged in during each session due to inactivity and fewer chances to log-in incorrectly before being logged out. Additional security features include several layers of authentication when signing in and fingerprint ID that you can use on your mobile device.

File early
One of the best ways to protect yourself from fraud is to file your taxes as soon as you receive all of your forms and statements. That way, you’ll stay ahead of the thieves who typically prey on those who wait until the last minute to file in hopes of getting their hands on the tax refunds before the victims do.

Most of the time, a victim may not know they’ve been scammed until after they’ve received an IRS notice. The notice may show that you collected wages from an employer you don’t recognize. You may also receive a notice saying that your Social Security number has been used more than once and by then, the damage is already done.

What if I am a victim?
It’s important that you immediately report any incident of identity theft to the Federal Trade Commission. You should also set up a fraud alert with one of the three credit bureaus—Equifax, Experian or TransUnion. When you file a report with just one of the bureaus, they will share the report with the other two. All three bureaus will provide you with a credit report—for FREE. You can also ask the bureaus to place a security freeze on any new credit being issued without your agreement.

The IRS wants you to know

Sources: irs.gov, moneytalksnews.com, consumerreports.org, courant.com