If you have not already, you are probably in the midst of preparing your tax return. It is one of the automatics in life. It is already painful enough, but now you have to worry about the risks of someone filing your return before you do?
According to BNA, The IRS Criminal Investigation division found nearly $10 billion in tax fraud in fiscal year 2018—four times more than 2017, thanks to the IRS’s focus on using data analytics.
While that number sounds scary, it should feel a little reassuring. The IRS has put some systems in place to help catch the fraudulent returns. The spike is in what the IRS found, not a spike in tax fraud. Hopefully these new IRS analytics will help deter the criminals and they will leave our tax relationships alone.
So, what can we do to help prevent tax fraud?
- File early.
- If you have any reason to believe you are at risk, place credit freezes or credit alerts.
- Monitor your credit and your identity.
- Make sure you trust your tax preparer.
- Apply for your federal tax ID number.
- Beware of scams, slow down and make sure you know who you are speaking to, emailing and texting.
How do you know if you are a victim of tax fraud? Know the warning signs.*
Be alert to possible tax-related identity theft if you are contacted by the IRS or your tax professional/provider about:
- More than one tax return was filed using your Social Security Number.
- You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return.
- IRS records indicate you received wages or other income from an employer for whom you did not work.