Our tax information gets increasingly more vulnerable in a developing digital age. Partners in the tax industry have made significant strides in improving defenses against identity theft, however, the best line of defense are tax payers themselves.
That is why the Internal Revenue Service, state tax agencies and the tax industry will be hosting National Tax Security Awareness Week for the second year. The event begins Monday, November 27, encouraging businesses and individual taxpayers to take extra measures to protect their tax data before the upcoming filing season.
More than 20 events across the country will be working to raise awareness during the week. These events will help taxpayers and business learn basic steps to protect online tax data, including strong passwords, security software and data encryption. Beyond prevention, participants can learn about what to do if they become a data breach victim.
Just in time for the holiday season
This event is strategically placed before the holiday season, when online shopping is at an all time high. It’s around this time that cybercriminals come out of the woodwork to steal sensitive information to use for fraudulent tax returns.
This event is not only relevant due to holiday shopping. It comes after more than 145 million people in the U.S. had their Social Security numbers, names and addresses stolen online. There are new and improved security measures in place that can prevent thieves from using that information alone to steal identities. The reality of the situation is that cybercriminals are constantly developing new schemes to steal information. The IRS is concerned that cybercriminals will use newly developed tactics to steal additional personal information from taxpayers, obtaining enough to file fraudulent tax returns.
How to prevent tax fraud
So what can individuals and businesses do to best prevent tax fraud? File your tax return early. The longer that taxpayers wait to file their returns, the larger the window of opportunity for criminals. If you wait long enough, someone could file your tax return using your information, and they will steal the profit. Failing to file a tax return can also lead to significant tax debts and sometimes criminal prosecution.
You will know that someone has stolen your tax return if you file your return and receive an Identity Theft Tax Refund Fraud notice. This notice will come from your tax professional or tax software company. It will state that the IRS was unable to file your return, meaning that someone did it before you. Your return will be put on hold and delayed. Worse yet, rectifying identity fraud can be a long and detailed process. You will need to consult a tax professional and fill out a significant amount of paperwork before it is resolved.
Take some time during National Tax Security Awareness Week to learn the most up-to-date methods of keeping your information safe.