Tax season is here and the Internal Revenue Service (IRS) is emphasizing online services this year to help consumers navigate the hectic tax filing season. Better Business Bureau Serving Eastern MA, ME, RI & VT is encouraging taxpayers consider the following tips in order to avoid the rapidly growing identity theft scam.
“It is extremely important for consumers and businesses to safeguard their sensitive information during tax season,” explained Paula Fleming, Vice President for the local BBB. “Taxpayers are encouraged to file their returns as early as possible to avoid tax identity theft.”
Here’s how it works: tax identity theft happens when someone files a phony tax return using your personal information — like your Social Security number — to get a tax refund from the IRS. It can also happen when someone uses your Social Security number to get a job or claims your child as a dependent on a tax return. Tax identity theft is the most common form of identity theft reported to the Federal Trade Commission.
Tax identity theft victims typically find out about the crime when they receive a letter from the IRS explaining that more than one tax return was filed in their name, or IRS records show they received wages from an employer they don’t know. If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.
To avoid being a victim of tax identity theft, BBB recommends the following tips for consumers:
1. File your tax return as early in the tax season as possible.
2. Use a secure Internet connection if you file electronically or mail your tax return directly from the post office. Shred copies of your tax return, drafts, or calculation sheets you no longer need.
3. Never provide financial or other sensitive information over the phone or in an email.
4. Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail. Respond to all mail from the IRS as soon as possible.
5. Do not give out your Social Security number (SSN) unless you initiate contact and know exactly to whom you’re giving the information. If your SSN has been compromised, contact the IRS ID Theft Protection Specialized Unit at 1-800-908-4490.
6. Research tax preparers thoroughly at bbb.org/boston before you hand over personal information.
7. Don’t fall for the promise of big refunds.Be wary of any tax preparation business that promises larger refunds than the competition, and steer clear of tax preparers who base their fee on a percentage of the refund.
8. Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.
To help businesses avoid the tax identity theft scam, BBB recommends the following tips:
1. There are many electronic filing options for small businesses. Be sure to use a secure Internet connection (https://) while filing electronically.
2. There are different taxes for different forms of small businesses. Click here to check out the list of business taxes from the IRS. Be aware that the IRS will not contact you by phone, email or online; if information is needed, they will contact you through mail.
3. If completing your business’ tax return by mail, be sure not to leave it in a mailbox that is easily accessible to the public.
4. If you don’t already have a tax preparer for your business, search bbb.org/boston to check out a preparer’s qualifications.
The IRS is encouraging taxpayers to use e-file or Free File as the fastest way to receive tax refunds. The deadline to file your taxes remains April 15, 2014, but consumers can request an automatic six-month extension if needed. The request is easily done with Form 4868, which can be filed electronically or on paper.
For more information you can trust, visit us at bbb.org/boston.