It is a new year, and a new year brings tax season. Many people this time of year are consumed with filing taxes by hiring accountants, finding an online tax service, or figuring it out on their own. Something that may not be a prevalent concern is scams. Millions of dollars are lost every year to scams. The Better Business Bureau’s Scam Tracker reported more than 800 scams in Idaho alone. in 2018. Out of the ten most common scams in Idaho in 2018, tax scams were number one. Although scammers are on the prowl year around, tax season gives them new ways to steal your information. It is important to take precautions this time of year to protect your personal information.
There are many ways to make sure your tax refund lands in the right hands. An article from nbcnews.com shares some helpful tips:
- File as soon as possible- Although taxes do not have to be filed until April 15th, the sooner you get it done, the better. Rick Henderson, principal at Atlanta Financial Associates says “Filing early lowers the chance that someone can get in front of you, which is essentially how fraudsters work because what they do is file a fake tax return on the chance that they’re doing so before you.”
- Clear the inbox on your email and use a shredder- a lot of important information can be shared through email; scammers only need your full name, birth date, and social security number to file a fake tax return. Also, shred any physical documents that have important information before you dispose of them. Henderson shares “buy a paper shredder to securely dispose of old billing and account statements, as well as other financial documents you no longer need; most ID theft happens via the trash.”
- Do not give personal information to the “IRS” over the phone- many scammers use phone calls to say that you owe money to the IRS. They may address you by your name and know some of your personal information. The IRS only communicates through the mail, they will never call or email you, so just hang up.
- Use official phone numbers to communicate with your bank or credit card company- scammers also pretend to be calling from your bank or credit card company, and these companies do actually call. If you receive a call from either of these institutions asking for verification of personal information, hang up and call an official number that can be located on your credit/debit cards, statements, or official websites.
- Never sign a blank tax return- Henderson says “some social-circles scammer will work in and become trusted in the circle and offer to file your taxes and just say ‘sign here and I’ll do it for you.’ Never sign it.”
- Hire a legitimate accountant to file your taxes for you- the IRS can help you find trustworthy accountants or services to help you file your taxes. Beware of tax “pop-up” shops that only come around during tax season.
- Monitor your credit all year- it is important to keep track of your credit report so that you can identify any changes. You may want to use a credit monitoring service that can scan your credit through the three credit bureaus (Equifax, TransUnion, and Experian).
If you become victim to tax fraud, you have the resources to report fraud and get your money back. Henderson shares “The valid taxpayer is still entitled to their refund. They will need to file the proper return using paper filing and, also, they would have to provide ID and proof that they are the valid filer. The process may take up to 6 months to get any refund due in that situation.”
If the tax season hassle has you wondering about ways to protect your hard-earned income and take control of your financial future, a Farm Bureau Insurance agent can help. Besides competitively-priced insurance products, our agents also offer products and solutions to help with your business, retirement, and estate-planning needs. Contact your local agent today to get started.