All a scammer needs to file a fraudulent return to collect your tax refund is your name, Social Security number, birth date and a computer.
According to the U.S. Justice Department, this scam – known as stolen identity refund fraud – results in annual losses of more than $2 billion to the U.S. Treasury.
Follow these steps to prevent scam artists from stealing your tax refund:
Spot fake calls from the IRS
The IRS impersonation scam is a relentless operation.
The caller accuses the victim of owing money on their tax return, hoping the person in question will be ignorant or afraid enough of their situation to cave in and immediately wire money or provide bank account details over the phone.
Know that the IRS will never…
Demand immediate payment over the phone, without mailing you a bill first.
Require a specific payment method or ask for credit or debit card information over the phone.
Or demand payment without giving you the ability to question or appeal the amount owed.
Monitor your accounts
When a data breach happens, your personal information is compromised and you might not even know it… at least not right away.
Last year we saw some of the most vexing online attacks in history; making it clear that anyone is susceptible.
It’s important to monitor your accounts and investigate any transactions that you don’t recognize.
Often, scammers will test your stolen card with a small transaction before making larger purchases. It’s best to catch them early by staying vigilant with your accounts.
Don’t give more personal information than needed
Whenever someone asks you for personal information – or anything about you for that matter – you must question their motive. What do they want with this information?
Remember that it doesn’t take a lot for a scammer to file a return using your identity.
Be wary of anyone asking for your personal information and ask if it’s necessary. There are some tax preparers out there who are scam artists too, so choose a reputable one.
Another piece of advice; don’t carry your Social Security card in your wallet.
Shred personal documents
Though the rise of the Internet has made online identity theft a major threat, some scam artists still take the old-school approach by dumpster diving for your personal documents.
Piecing together information from what you toss out, a scammer can easily file a tax return in your name and take the refund.
Use a paper shredder to destroy all documents containing your personal information before you throw them away.
A scammer cannot collect your refund if you file before they fraudulently file using your name. The early bird gets the worm, so file early.
Follow these preventative measures so that a scammer doesn’t steal your tax refund!