Tax Return Season Brings up Tax-Related Identity Theft Concerns
Despite a steep drop in tax-related identity theft in recent years, the Internal Revenue Service today warned taxpayers that the scam remains serious enough to earn a spot on the agency’s 2019 “Dirty Dozen” list of tax scams.
“Taxpayers should continue to protect their sensitive tax and financial data to help protect against identity thieves,” IRS Commissioner Chuck Rettig said. “The IRS and the Security Summit partners in the states and the private sector have joined forces to improve our defenses against tax-related identity theft, sharply reducing the number of victims. But we encourage taxpayers to continue to be on the lookout for identity theft schemes, including email phishing attempts and other tax scams.”
The IRS’ “Dirty Dozen” is compiled annually and outlines a variety of common scams taxpayers may encounter any time during the year. Many of these schemes peak during filing season as people prepare their tax returns or hire tax professionals.
Tax-related identity theft occurs when someone uses a stolen Social Security number or Individual Taxpayer Identification Number (ITIN) to file a fraudulent tax return claiming a refund.
The IRS, the states and the nation’s private-sector tax industry began working together in 2015 as the Security Summit to fight tax-related identity theft. Security Summit partners enacted a series of safeguards that are making inroads against identity thieves and protecting taxpayers. These safeguards include expanded information sharing among the Summit partners as well as strengthened internal IRS controls to guard against fraudulent tax returns.
Taxpayers should remember that identity thieves constantly strive to find a scheme that works. Once their ruse begins to fail as taxpayers become aware of their ploys, they change tactics. Taxpayers and tax professionals must remain vigilant to the various scams and schemes used for data thefts. Business filers should be aware that cybercriminals also file fraudulent Forms 1120, U.S. Corporate Income Tax Return, using stolen business identities and they, too, should be alert.
Security tips for taxpayers, tax professionals
The IRS and its partners remind taxpayers and tax professionals that they can do their part to help in this effort. Taxpayers and tax professionals should:
- Always use security software with firewall and antivirus protections. Make sure security software is turned on and can automatically update. Encrypt sensitive files such as tax records stored on the computer. Use strong passwords.
- Learn to recognize and avoid phishing emails and threatening phone calls and texts from thieves posing as legitimate organizations such as banks, credit card companies and government organizations, including the IRS. Do not click on links or download attachments from unknown or suspicious emails. Invest in good anti-spyware and anti-malware software protection.
- Protect personal data. Don’t routinely carry a Social Security card, and make sure tax records are secure. Treat personal information like cash; don’t leave it lying around.
The Security Summit has worked to increase awareness among taxpayers and tax professionals about tax-related identity theft and security steps through its “Taxes. Security. Together.” and “Protect Your Clients; Protect Yourself” campaigns.
Reversing the damage caused by identity theft is often a frustrating and complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft has occurred. The IRS is working diligently to resolve identity theft cases quickly. For more information, see the special identity theft section on IRS.gov.
- Identity Theft Guide for Business Partnerships, Estates and Trusts
- Publication 4557, Safeguarding Taxpayer Data: A Guide for Your Business