It’s that time of year again – taxes. And filing taxes is faster than ever with many options for filing online. However, scammers are working overtime now – realizing that lots of money and personal information are flowing over the internet.
Identity theft is on the rise across the United States. The IRS defines tax-related identity theft as someone using your stolen Social Security Number to file a tax return claiming a fraudulent refund. In general, identity thieves file false returns using your social security number early in the year. You are often unaware you are a victim until you attempt to file your taxes – then discovering that a tax return has already has been filed using your SSN. (wtnh.com)
A recent example is TurboTax. Last month the popular tax-filing software, owned by Intuit, temporarily stopped state income tax filings after proof of fraud became evident. Some customers logged in to find that a return in their name had already been filed. Nineteen states reported high numbers of fraudulent returns.
In a statement, the company said “During this tax season, Intuit and some states have seen an increase in suspicious filings and attempts by criminals to use stolen identity information to file fraudulent state tax returns and claim tax refunds.”
“As it worked with state governments to assess and resolve the recent issues, Intuit took the precautionary step Thursday, Feb. 5, of temporarily pausing its transmission of state e-filing tax returns,” the company’s statement continued.
“Intuit will be working with the states today to begin turning transmissions back on. Customers who have already filed their state tax returns using Intuit software during this temporary pause will have their returns transmitted as soon as possible. They do not need to take further action at this time. This action does not affect the filing of federal income tax returns, and is limited to those states that require residents to file returns.” (Intuit)
Intuit said a third-party security audit turned up no signs of a security breach with the company, and that the information used to file fraudulent returns appears to have been obtained from other sources outside the tax preparation process. (KrebsonSecurity)
While the question of who’s to blame might remain uncertain, there are many ways we can safeguard personal information. Here’s a list of tips designed to help keep your identity safe as you prepare your tax return.
Tax Season Data Security Tips
Clean Your Data: Review your computer for data that may put you at risk and remove it. The University has a program for cleaning work computers – Identity Finder. Your local ISO can issue a license for use of Identity Finder to clean your personal computer as well.
Secure Your Data: Help defend against unauthorized access by ensuring your computer is protected by anti-virus software, anti-spyware, and a firewall. Now is a good time to install the latest versions of security software.
Use Reputable Tax Preparation Sites: Before providing your sensitive information to a website, confirm that it is a reputable tax preparer. The IRS provides a list of sanctioned E-file and Free File tax preparers on the official IRS site. Also, review the reliability of a company by searching the Better Business Bureau’s website, bbb.org.
Ensure the Tax Preparation Site is Encrypted: Just because the website says the page is secured, doesn’t necessarily mean that it is. Before entering your sensitive information, look for the “https” in the address bar and a “lock” next to the address or at the bottom of your web browser. Many web browsers will change the color of the address bar to green when you are on a secured page. This prevents your information from being read during transmission. (Charter Communications)
Encrypt Tax Preparation Data: Encrypt tax preparation work on your computer to protect it until it’s needed again next year.
Avoid File Sharing Software: An improperly configured file sharing program could potentially share all the contents of your hard drive – including sensitive documents such as tax returns – with millions of other users. It is recommended that you do not store sensitive documents on the same computer with a file sharing program. (Charter Communications)
Be Wise About Wi-Fi: Before you send personal information over your laptop or smartphone on a public wireless network in a public place, verify that your information will be protected. If you use an encrypted website, only the information you send to and from that site is protected. If you use a secure wireless network, all the information you send on that network is protected. (Federal Trade Commission Consumer Information)
Don’t Fall for Phishing Scams: Delete emails that purport to be from the IRS and banks asking for your sensitive data. They make look authentic, but don’t be fooled. And above all, don’t click on any links. (smallbusinesscomputing.com)
If you become a victim, the IRS is willing to help. Read about the agency’s prevention and detection endeavors at IRS.gov/Individuals/Identity-Protection.