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Cyber Security Ripples, Make Waves this Tax Season

February 12, 2018 in Small Business Security

This tax season has resulted in a lot more questions surrounding technology, cybersecurity and identity protection than any other tax season before. With an estimated 145 million Americans affected by the Equifax breach, many are rightfully worried about tax fraud this season. Here is why you should care about security and what you can do to protect yourself. 

Why you should care

  • The U.S. Government Accountability Office conducted a study last year, focusing on Identity Theft Services. They found that most services (even the paid ones), do not address threats like tax refund fraud or medical identity theft. 

 

What can you do to protect yourself against tax fraud? 

In many ways, the hay is in the barn and your information is likely already out there to be bought and sold. The recommended course of action is to file your taxes sooner than later. The IRS implemented more security measures, like a verification code (Box 9) to add another layer of complexity to file frequently. However, many people get digital forms of their W-2's and if their email or computer is compromised that code is accessible 

Signs that your taxes have already been filed

  • Unexpected tax bills from the IRS
  • Lower return than expected
  • Credit denial on unfamiliar accounts on your credit report

 

What should you do if you think you are a victim of tax fraud? 

  • Call the IRS, 1-800-829-2410, as soon as you become suspicious. Catching this quickly may not stop the initial fraud, but the criminals have your personal information and are using it. Therefore, it's reasonable to assume they will try other methods of fraud. 
  •  If the IRS can verify that there is fraud, contact the police. You will have to file an ID Theft Affidavit Form 14039 with the IRS.  
  • Call the FTC ID theft Hotline. 1-877-438-4338 and the three credit bureaus to notify them.  

 

Going forward, what  you can do: 

  • Protect and monitor your credit. 
  • Be suspicious and pessimistic when asked for your social security number or other personal information. 
  • Put your SS Card in a protected area, lock box, etc.  
  • Shred your financial documents before discarding them.  
  • Use firewalls, anti-virus and change your password frequently.
  • Make sure that your tax preparer (included lawyers, financial advisors, CPA's, actuaries and enrolled agents) are qualified to handle your information. Is their network overly secure? They should include their Tax Prep ID number and sign your tax forms. They should also file with the IRS e-file system and provide you with copies.  

 

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Kyle Moore

Kyle Moore

Kyle grew up in the thin air of a small Rocky Mountain town, which explains why he loves skiing, fishing, and biking. That oxygen deprivation also probably explains why he is so weird. Before LIVE Consulting, he worked as a shepherd in Australia, a missionary in Africa and ski patroller in Vail.

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