Identify Theft and Tax Returns
Identity theft is still a serious concern for many individuals. We hear about it in the news regarding credit cards when it is Target or another large organization that has a security breach. Social Security numbers can be just as dangerous when that information is stolen from taxpayers. This time of year our clients are trying to get us their information quickly to expedite the completion of their tax returns. While many are careful with their personal information we find that clients will send tax documents with their Social Security numbers on them to us via email. As much as we strive to be a paperless office we recognize the dangers in electronically transferring personal information over an unsecured connection. In our office we utilize Sharefile which allows us and our clients to share information with each other via a secure portal. Each client has an individual login with their email and chosen password. Our custom Sharefile site can be found here:
Tax-related identity theft and fraud is a big concern in our industry. Having helped clients with this issue, we know that it can be a frustrating and time-consuming ordeal to go through. With a stolen name and Social Security number it is all too easy for someone to file your taxes and claim a large refund. Typically the fraud is only discovered when clients go to file their tax return and someone has already filed under their Social Security number. Any refunds due can take a year or more to receive since someone has already claimed it and there is a formal process for proving your identity. With the IRS being understaffed we anticipate those identity theft cases taking even longer now.
The IRS is also trying to avoid future identity theft by instituting a program for Identity Protection Personal Identification Numbers (IP PIN). Currently, only certain individuals are eligible for an IP PIN (see link below). Once registered for an IP PIN that number is required to file the tax return. This helps prevent fraudulent filings since this six-digit IP PIN is not related to the taxpayer’s social security number. Keep in mind that once an IP PIN is applied for it must be used on all tax filings going forward. Each year a new number is received from the IRS. The steps to apply are below for eligible individuals:
We encourage our clients to avoid using email to send personal information when possible. The extra time to log on to our Sharefile site or drop by the office can save you countless hours and stress if your identity were to be stolen.