By Carrie Kerskie, Director of the Identity Fraud Institute
As you begin to prepare your taxes, you may include the following identity theft mitigation steps.
If you have not done so already, request your free credit reports. You are entitled to one free credit report every 12 months from each credit bureau. They are TransUnion, Experian and Equifax. The easiest way to obtain your free credit reports is by visiting www.AnnualCreditReport.com or by calling 1-877-322-8228. AnnualCreditReport.com was developed by the three credit bureaus and the Federal Trade Commission to make it easier for you to get access to your free credit reports.
Don’t forget about the fourth credit bureau, Innovis. You can get your free credit report online at www.Innovis.com or by calling 1-800-540-2505.
After you have reviewed all of your credit reports, you may want to consider staggering your future requests to once every three months. Just make a note on your calendar.
Another report to review is your annual social security statement from the Social Security Administration (SSA). This can be obtained by logging in to your MySSA account. This is an online account that enables you to view and, if applicable, manage your benefits or apply for benefits. If you have not yet set up your MySSA account, you can do so by visiting www.SSA.gov. When reviewing the report, check the reported income amount. This information is provided by the IRS to the SSA. The reported income is used to determine your future benefits. If the reported income is incorrect, contact the SSA. It could have been a reporting error or it could be a red flag for employment identity theft.
Some documents must be kept for a specific period of time while others do not. When you no longer need the documents, don’t throw them in the trash. To protect your information, you should shred the documents prior to disposing of them. The smaller the shred cut the better.
If you received a new computer, smartphone or another device during the holiday season, use caution when disposing of your old device. Simply reformatting a computer does not remove your sensitive information. You need to wipe the device. Wiping makes the information on the device unreadable. There are software tools and companies that can help you with this process. If you hire a company, make sure they provide you with a certificate verifying that the device has been wiped and the information is unreadable. Once the device has been wiped, you can sell it online or donate it. If you prefer to dispose of it, contact your local recycling center.
All of us tend to become lazy when it comes to changing our passwords. Start a new habit of changing your passwords at the end of or the start of each new year. Start with your sensitive accounts such as bank accounts, credit card accounts and anything that could contain sensitive information. The longer the password the better the protection – Twelve characters at a minimum. Think beyond a word. Use a phrase or a song lyric. Get creative. Just don’t use the same one for every account.
Now you need to determine where you are going to keep your new passwords. You can use paper and pen, just make sure you lock it up when not in use. The next step up would be to store them in a spreadsheet or document. Make sure the file is password protected and backed up offline. A step up from here would be a password app or program. A few of these have been breached in the past, so do your research before trusting a third-party with your password information.
Beware of IRS and Tax-Related Scams
Tax season is the perfect season for scammers. It provides plenty of opportunities for scammers to get between you and your information or your money. The typical scams include the IRS impersonation phone call. The scammer will call pretending to be from the IRS. He will say you owe money, and he will demand immediate payment. While the IRS may call you, they would never demand payment over the phone.
Another scam involves sending you a phishing email that appears to be from the IRS. The email states there is a problem with your return and you need to click the link or open the attachment. You should never click on a link or attachment in an unsolicited email. If you receive an email from the IRS and you are unsure if it is legitimate, your best defense is to call the IRS at 1-800-829-1040. This number can be found by searching for the IRS phone number online.
You should also be careful with potential man-in-the-middle attacks. The IRS has stated that accounting and tax prep companies are prime targets for hackers. Once hacked, the hacker can intercept communications between them and their clients. If you should receive an unsolicited email from your accountant or tax preparer, contact them directly to verify the legitimacy of the email.
Another thing to consider when communicating via email with your accountant or tax preparer is that emails are not protected. When the information is in transit, between your computer and your accountant’s computer, it is susceptible to being intercepted. To protect yourself, use email encryption when sending sensitive information. You should ask your accountant or tax preparer to use email encryption when sending you sensitive information. Many of them have already begun the transition to encrypted email.
Back Up Computers and Devices
No one wants to lose important files such as family photos or tax documents. Protect your information by backing up all of your files at the end of the year. You can back them up to a portable external hard drive or another USB type of device. It is always a good idea to have two copies of a backup just in case one should fail or become corrupt. Store the backup in a secure location such as a locked file cabinet or safe, especially if the files contain sensitive information.
Filing your return early is a great way to prevent someone else from doing it on your behalf. This does not apply to filing an extension, only the return itself. To help expedite the process, begin gathering your tax receipts as soon as possible. If you have any deductibles, such as medical expenses, add up your receipts to have your totals ready. The more organized you are the faster you will be able to file your return. If you are using an accountant or tax preparer, make sure to send him or her your information as soon as it is available.
The final decision is how to file. E-filing is the preferred method as you receive an almost instant confirmation from the IRS that your return has been received. If you are unable to e-file for example, if the IRS told you that you must file a paper return, it should be sent certified mail. By sending it certified, you will receive a confirmation when the IRS has received your return. It also lessens the risk of your return being stolen during transit as it is being tracked. Criminals have now resorted to fishing for outgoing mail in the big blue United States Postal Service (USPS) mailboxes. They tie a string to a stick and attach a sticky substance to the other end of the string before sticking it in the box and fishing for mail. Protect yourself by placing your paper return in the outgoing mailbox inside of your local USPS.
By using these tips you will be in a better position to reduce your risk of identity theft.