Lessen Your Risk of Identity Theft

Lessen Your Risk of Identity Theft

You may have seen or heard advertisements for identity theft protection. Usually, the advertisement or commercial will use humor to make a point. If you have become a victim of identity theft, you can agree that it is no laughing matter.

According to the Federal Trade Commission, in 2020, there were nearly 1.4 million reports of identity theft reported on the FTC’s IdentityTheft.gov website. The FTC goes on to state, “Of the identity theft reports received in 2020, 406,375 came from people who said their information was misused to apply for a government document or benefit, such as unemployment insurance. That represents a tremendous increase from 2019, when the number was 23,213” [1].

Due to the COVID-19 pandemic, people are at home and online more than ever. Business is not conducted face-to-face in a building, it is now on platforms such as Zoom and Microsoft Teams. Educational classes, from elementary to Doctorate programs, are taught online. Instead of going to a restaurant to eat, you order online or through a phone app. You can even order your groceries and have them delivered!

With this fact, it should be no surprise that identity theft is on the rise. Either the scammer is pretending to be someone you know or trying to get access to your information. Consider all the personal data that is located on social media or on your laptop, tablet, or smart phone. A criminal only needs to obtain a few items of that information and they can begin stealing your identity.

Lessen the Risk of Identity Theft

There is no guaranteed way to prevent having your identity stolen or compromised. If it does happen, there is no panacea to make it better. Shielding your private information with no risk of a breakdown is almost impossible these days. There are some steps that you can take to lessen the chance of your identity being compromised or stolen [2].

  • Keep your social security number secure. Don’t carry your social security card in your wallet. Only provide your social security number when necessary.
  • Don’t share personal information (birthdate, social security number, bank information) just because someone asks for it.
  • Collect mail every day.
  • Review your credit card and bank statements. Compare your receipts and check for any unauthorized transactions.
  • Shred receipts, credit offers, account statements, and expired credit cards. Fraudsters will “dumpster dive” to obtain your personal information from these items.
  • Review your credit reports at least once a year. Check for accounts that you either did not open or do not recognize. You can order one credit check per year for free from Annualcreditreport.com.

The IRS and Identity Theft

One of the acts that fraudsters perform is preparing and submitting tax returns with stolen personal information. Tax-related identity theft occurs when someone uses stolen personal information, including social security numbers, to file a tax return to claim a fraudulent refund.

There are signs that it is possible that a person has become a victim of identity theft. These include but are not limited to [3]:

  • You receive a letter from the IRS inquiring about a suspicious tax return that you did not file.
  • You cannot electronically file your tax return due to a duplicate social security number.
  • You receive a tax transcript in the mail that you did not request.
  • You receive a letter that an IRS online account was created in your name.
  • IRS records show that you earned income from an employer that you never worked for.

The IRS has improved their surveillance to try and catch fraudulent returns before they are processed. In these instances, the IRS will mail out a letter requesting that you verify your identity. If you do receive one of these letters, follow the instructions and call the IRS.

Actions You Can Take

With some commonsense actions and a little awareness, you can lessen your chance of becoming a victim of identification theft. But what happens if you do become a victim? The important thing is to remain calm. These are four suggestions to begin the path of reclaiming your identity:

  1. Call companies where you know fraud occurred.
  2. Place a fraud alert on your credit reports.
  3. Report the identity theft to the Federal Trade Commission.
  4. You may even need to file a report with the police department.

If you do become a victim of identity theft, you should talk to your financial institutions to determine how best to avoid further damage. This may include closing and reopening accounts, even ones that have not been affected or compromised. It can be a tedious process but a necessary one to stop the criminal from having control over your identity and money.

An IRS tax security tip is to request an Identity Protection PIN (IP PIN). The IRS now allows anyone who has a social security number or Individual Taxpayer Identification Number to apply for an IP PIN. Previously, you had to be a victim of identity theft or fraud to request one.

The IRS explains, “an Identity Protection PIN is six-digit number eligible taxpayers get to help prevent their Social Security number or Individual Taxpayer Identification Number from being used to file fraudulent federal income tax returns. This number helps the IRS verify a taxpayer's identity and accept their tax return” .

At ADKF, we have a trained group of professionals in our Department of Tax Controversy that offer a variety of services that can assist you if you become a victim of identity theft. If you have any questions about identity theft or the IP PIN program, please don’t hesitate to contact us at (210) 829-1300.

1: https://www.ftc.gov/news-events/press-releases/2021/02/new-data-shows-ftc-received-2-2-million-fraud-reports-consumers
2: https://www.usa.gov/identity-theft#item-214444
3: https://www.irs.gov/newsroom/taxpayer-guide-to-identity-theft


ADKF
is the largest, locally owned public accounting firm in San Antonio, Texas, with branch offices in Boerne and New Braunfels. We have been serving our community since 1991. We are a full-service CPA firm dedicated to providing a broad range of tax, audit, bookkeeping, tax controversy, and consulting services with superior customer service to help our clients meet their goals and objectives. Please click here to set an appointment with us.

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