I recently attended a class held by the IRS which focused on many issues that we face as taxpayers and practitioners but the most alarming was the current epidemic, Identity Theft, and identity theft scams. The Federal Trade Commission (FTC) estimates that as many as 9 million Americans have their identities stolen each year. It’s the number one complaint filed with the FTC, with reports up 650% since 2008. The IRS received 641,052 identity theft complaints in 2011.
The FTC sees a majority of these incidents occurring around government benefits. Examples are fraudulent collection of someone’s disability, welfare or social security benefits. Identities are often stolen from documents by dumpster diving (shred, shred, shred!), skimming, phishing, theft, changing your address, and pre-texting (scam involving a liar who pretends to need information in order to confirm the identity of the person he/she is talking to).
Common IRS And Identity Theft Scams
Scams via telephone have become much more common. The caller may ask you to wire money for a loved one who has supposedly been detained while on vacation. Or, they may ask you to purchase gift cards from retailers like CVS or Target, then send them the card numbers, saying their organization has a corporate agreement with the retailers.
They are capable of masking their phone numbers to match your local IRS office, so do not count on that to confirm their identity.
Before sending money or giving out any personal, identifying information, do your homework. Ask to talk directly with the person who needs money or look up the organization online to verify what the caller is telling you.
How To Protect Yourself From Identity Theft
Protect yourself! The class I attended offered some basic advice for avoiding identity theft scams. They suggested implementing these four rules:
- Never email your personal ID information
- Shred all documents
- Be skeptical of anyone trying to obtain your personal information
- Monitor your credit regularly
(Also read: IRS Scams — Do Not Accept Phone Calls or Emails!)
Are there any other ways you can protect your identity? Have you ever encountered a situation you thought was a scam to get your personal ID information?
Call us if you think your ID has been compromised as it may impact your tax filings. You’ll need help to act quickly and prevent any further damage.
If you discover that you’re a victim of identity theft, it’s important to file an affidavit immediately. I was recently interviewed by FOX26, a local news station, and spoke on the subject here.
Resources Used:
May 8 TIGTA Report (Treasury Inspector General of Tax Administration)
IRS/ Practitioners Forum, November 2, 2012, Portland, Oregon.
By: Sarah Moore, Manager at WHH
