Compiled by Liz Barton, Vice President; and Dana Higgins, Senior Vice President, Information Protection and Privacy, Bank of America
pproximately one in four people in the United States will be a victim of identity theft, the fastest-growing crime in the United States.1 Documents prepared at tax time contain highly sensitive and confidential information about a person or a business. Safeguarding this information appropriately can help reduce the risk of identity theft. As tax season approaches, there are actions consumers can take to help keep their personal information safe and protect themselves against identity crime.
Tips to Help Protect Consumers
Secure All Paperwork and Tax Documentation: Protect tax forms and supporting documentation by keeping them in a safe and locked location.2 If the information is stored in a home, it should be hidden and not easily found. Consumers should be especially cautious with W-2 or 1099 forms because they contain social security numbers. Consumers should not carry important tax information in their briefcases or leave it unattended in a car.
Dispose of Documents Securely: Shred all paperwork used to prepare and calculate taxes such as receipts, bank records, credit card statements, and other various forms when they are no longer needed. Identity thieves can obtain personal information by retrieving it out of the trash and dumpsters. Note that some information does need to be retained for audit purposes. Consumers should consult the Internal Revenue Service (IRS) Web site or a tax professional for rules regarding what information and records need to be retained and for how long.
Secure Computer and Files: Consumers should take proper precautions when preparing and storing tax documents on a computer by protecting them with encryption and/or passwords. If tax returns are filed over the Internet, consumers should make sure to have updated firewall, antivirus, and spyware software to prevent computer invasion.3
Submit Tax Returns Securely: If tax returns are sent through the mail, consumers should send them certified mail with a return receipt for safety and documentation purposes. If returns are sent regular mail, consumers should always put them in a secured mailbox or take them to the post office. Consumers should not put them in their mailboxes with the mailbox flag up, which can alert potential thieves. Make sure tax documents and checks (if included) are not visible through the envelope.4
Choose Tax Preparers Carefully: Consumers should conduct research before selecting a tax preparer. Consumers can leverage information from the Better Business Bureau to see if the tax preparer or company has a questionable history.5 A tax preparer has access to a person’s highly sensitive information, and consumers should feel comfortable with the way that person or company handles the information. Consumers should not choose a tax preparer or company that shares or sells information with a third party.6 For additional tips on how to choose a tax preparer, access information provided by the IRS.
Use Direct Deposit: Consumers should request to have refund checks directly deposited into their bank accounts, regardless of how a tax return is filed. This can help avoid the risk of the check being lost in the mail or stolen from a mailbox. In addition, direct deposit usually provides access to refunds sooner.
Be Wary of IRS Scams
Identity criminals have become more sophisticated and have developed scams posing as the IRS. They are running scams related to the IRS and tax refunds. Here are some tips to help prevent consumers from becoming victims:
- The IRS does not initiate taxpayer communications through e-mail. Consumers should never provide bank account information or social security numbers for refunds via e-mail.
- Consumers should be suspicious about receiving e-mail from the IRS and being asked to click on a link to a Web site to enter personal information. Even though the Web site may look legitimate and professional, the IRS does not conduct business by e-mail. All IRS Web page addresses begin with http://www.irs.gov/.
How Law Enforcement Can Help
Take the Report: Complete a police report for all identity crime victims. Copies of police reports may be required for victims to clear up their credit reports and eliminate fraudulent charges.
Provide Victim Assistance:
- Distribute the IACP’s Get Back Your Good Name recovery toolkit, found on the idsafety.org Web site. This toolkit provides information on steps to take and whom to contact (including phone numbers and addresses) if someone has become a victim of an identity crime.
- Advise victims to contact all the financial institutions (banks, credit unions, credit card companies, mortgage companies, brokerages, and so on) where they have accounts that may have been subject to identity theft takeover.
- Instruct victims to contact the fraud units of the three principal credit reporting agencies and place a fraud alert immediately. Consumers should be encouraged to conduct ongoing monitoring of their credit reports.
P.O. Box 740241
Atlanta, GA 30374
Experian (formerly TRW)
P.O. Box 9532
Allen, TX 75013
P.O. Box 6790
Fullerton, CA 92834
Where to Get More Information
- For more information on tax-related scams, or if you suspect a scam related to taxes and/or the IRS, please visit “How to Protect Yourself from Suspicious E-Mails or Phishing Schemes” at the IRS Web site.7
- Consumers can also forward suspicious e-mail to the Federal Trade Commission at email@example.com; they can also contact the commission at http://ftc.gov/ftc/contact.shtm or 1-877-IDTHEFT (438-4338).
- For additional information on identity theft prevention and recovery, visit the IACP Web site: www.theiacp.org. ♦
1See the IACP/Bank of America ID Safety Web site at www.idsafety.org for more information.
2“Identity Theft and Tax Time Tips,” press release, January 23, 2007, Identity Theft Resource Center, http://www.idtheftcenter.org/artman2/publish/m_press/Identity_Theft_and_Tax_Time_Tips.shtml (accessed January 29, 2008).
3ARA Content, “Tax Season Leads to Increased Risk for Identity Theft,” http://www.eversave.com/eversave/mc/articles/TaxSeasonLeadstoIdentityTheft (accessed January 29, 2008).
4Frank Abagnale, “Prevent Identity Theft at Tax Season,” http://soundmoneytips.com/article/31063-prevent-identity-theft-at-tax-season (accessed January 29, 2008).
5“Identity Theft and Tax Time Tips.”
6“International Association of Chiefs of Police and Bank of America Offer Tax Time Tips to Prevent Identity Crime,” press release, http://www.idsafety.org/cms/index.cfm?fa=viewArticle&articleID=36 (accessed January 29, 2008).
7“How to Protect Yourself from Suspicious E-Mails or Phishing Schemes,” Internal Revenue Service, http://www.irs.gov/individuals/article/0,,id=155344,00.html (accessed January 29, 2008).