tax return and hand cuffs

Fraudulent Tax Returns—How to Protect Yourself and Your Parents

There’s a disturbing trend that’s endangering the financial security of you and your parents. Identity thieves are stealing other people’s personal information and using it to file fraudulent tax returns. These thieves file fraudulent returns without being caught, hoping that IRS processing weaknesses will prevent them from being identified before they receive a refund. These scammers are stealing money from the government, while also hindering your ability to file a genuine tax return and receive a refund–not to mention the headache and stress they incur as you take efforts to rectify the situation. It’s important to be aware of this alarming new scheme, and to take steps to prevent this from happening to you and your aging parents.

Identity thieves often file fraudulent tax returns as early as possible, in an effort to have the bogus return processed before an individual can file his or her own legitimate return. You may therefore be unaware you’ve been victimized–until you attempt to file your taxes. It’s important to be on the look-out for IRS notices that appear to be inaccurate. Phony warnings may include notices indicating that: more than one tax return was filed with your social security number, you owe an additional tax that appears to be inappropriate or records show you have received wages from an unknown employer. These warnings may indicate that you or your parents may have been defrauded in a tax scheme.

There are several ways to reduce your family’s chances of becoming a victim of tax return identity fraud. One of the most important tips is to keep your social security number, as well as other personal information, stored in a secure place (i.e. not your wallet), and avoid mentioning it on the phone or online unless absolutely necessary. Consider installing extra security on your computer. Be sure to check your credit report and Social Security Administration earnings regularly, looking for anything suspicious or irregular. You should also be aware that the IRS does not routinely email, make phone calls or communicate through social media. Any communication from those sources is likely to be fraudulent and should immediately be reported to phishing@irs.gov. Assume that unexpected calls from the IRS urging you to give or confirm financial information are fraudulent and should be reported to: www.irs.gov/Individuals/Get-An-Identity-Protection-PIN.

In some instances, you may be eligible for a number called an Identity Protection PIN (“IP PIN”). An IP PIN is a 6-digit number given to qualified taxpayers to help prevent the filing of false tax returns. Once the tax payer obtains their unique IP PIN, they must file all their tax returns using this number, which should help ensure that no other returns are filed with their social security number. Please note that this PIN is different than the 4 digit e-file signature PIN, which is used for filing online returns.

If you are interested in obtaining an IP PIN, you can register your PIN by following the steps at www.irs.gov/Individuals/Get-An-Identity-Protection-PIN.

For more information on IRS tax return fraud and prevention methods, visit their website at www.irs.gov/.