Use this checklist to help protect yourself from bad actors during tax season.
Fraudulent activity rises dramatically during tax season. And with the continued increase of electronic filing, it's important to watch out for one type of fraud, in particular: tax identity theft. Tax identify theft is a scam in which bad actors steal the victim’s tax information and use it to file fraudulent returns in their name in hopes of pocketing hefty refunds.
We are here to be a resource to you as you seek to protect your financial information from bad actors. Here’s how to help prevent tax identity theft:
1. Be cautious when providing personal information
Never provide personal information over the phone, through the mail, email or online unless you have initiated the contact and can confirm the recipient. Be especially careful to take steps to ensure your Social Security number is not compromised. In cases of tax identity theft, specifically, a person’s Social Security number is the key piece of information that the bad actor needs to fraudulently file a tax return.
2. Know how the IRS officially communicates
The Internal Revenue Service (IRS) only uses the United States Postal Service to communicate with taxpayers for initial contact. While the IRS may sometimes call you, it’s only after initial contact has been made via postal mail.
The agency never uses social media, text or email. Do not open any attachments or click on any links in an email or text message from an entity claiming to be the IRS. If you receive a phone call or email claiming to be from the IRS — especially with threats of lawsuits or arrests — it is likely a scam and you should not respond.
3. Get your personal identification number (PIN) early
If you know you'll be filing electronically, go to the IRS website and acquire your electronic filing personal identification number (PIN) number. Once you have your PIN, no one else can file under your name without it.
4. File as soon as you receive all your tax statements
Once a return has been filed under a specific Social Security number, the IRS won’t allow a second. As such, the earlier you file, the better the chance of preventing tax return identity theft. Once you receive all your tax statements, work with your tax professional to file as soon as possible, if it makes sense for your specific situation.
5. Properly retain and dispose of documents with your information
Managing, retaining and disposing of the constant flow of paperwork and financial records that contain your personal information can be overwhelming. After all, it’s not uncommon to regularly receive paper mail with sensitive information from a myriad of financial institutions, insurers and government agencies.
Follow these personal financial record retention guidelines for guidance on how long you should retain documents with sensitive information.
For documents that should be discarded, avoid throwing them in the trash. Shred any documents containing account numbers, birth dates, Social Security numbers or other potentially identifying information before you dispose of them. This can help reduce the chances of a bad actor coming across your personal information.
How to keep your financial records organized
Efficiently organize, retain and dispose of important documents with these personal financial record retention guidelines.
Learn more
6. Keep personally identifiable paperwork in a secure spot
For paperwork that needs to be retained for your records, take care to not leave your papers lying around your home. It’s not uncommon for identity theft to be committed by people who know the victim. Instead, consider storing paper documents in a secure place, such as a filing cabinet with a lock. A fireproof safe can also be a good option if you need to keep physical records secure, but accessible, at home.
7. Verify your tax preparer
Working with a professional to file your taxes can be beneficial as they can help identify opportunities to lower your overall tax burden. Your Ameriprise financial advisor may be able to refer you to a tax professional.
However, if you are looking for a tax preparer on your own, do your due diligence to make sure they are legitimate. Check them out on the Better Business Bureau's website and conduct a general online search to make sure the individual has a good reputation and no complaints have been filed against them.
If you think you're a victim of tax identity theft
If you suspect thieves have gotten hold of your personal financial information, follow the latest guidance from these government agencies on how you can address the situation:
Your security is a priority
We can help you understand the steps that Ameriprise Financial takes to help protect your financial accounts.