Wednesday, July 20, 2016

The IRS & ID Theft: "New" News!

Picture Courtesy: Free Images From www.pixabay.com
There is something about old doors and entry ways that fascinate me! Maybe it is the mystery of what lies beyond, the unknown, the thrill of opening closed doors to discover new places, new feelings, new people. But it is not as simple as that anymore, is it? These are different and more difficult times we live in now, I guess!

We could go down a very deep, philosophical route  examining what Identity is, but we have to limit our discussion here to what Identity is in a digital age, and we all know how that ties into our finances! We also know of all the hacks trying to get in on that precious information.  

So, What is ID Theft?:
If you are new to this, here's a dictionary definition, "The fraudulent acquisition and use of a person's private identifying information, usually for financial gain". So if someone stole your credit card information, social security number and used it to their advantage pretending to be you racking up hundreds & thousands of dollars in credit card payments, stealing your tax refund, getting medical care etc., you could consider your Identity to be stolen. 

I had written about some basic measures you can take to protect your ID from being stolen on this post back in January 2014

For past 2 years, there have been phone scam artists who have made off with millions successfully convincing people that they are calling from the IRS. 

The authorities arrested the scammers but more have surfaced since then, some targeting only millennials, who are being asked to pay up their so called IRS or other debts in i-Tunes gift cards!  More on that story by the Federal Trade Commission here

The Internal Revenue Service has had it's share of woes. Earlier this year, their website where one can download a personal transcript of taxes filed, the "Get My Transcript" page has been hacked multiple number of times. The crooks have gone a step further and have been able to put together enough information about people from the Internet and their social media profiles to be able to log into the website and get these transcripts. USA Today reported that story in February 2016

If you get a notice from the IRS of an "attempt" to get a transcript, or you actually get a transcript from the IRS for a previously filed tax return, you should immediately contact your tax provider. If they are not available or do not know what to do, submit Form 14039 immediately to the IRS. Link to form here.

We had quite a few converts over from Do-It-Yourself tax software programs during the 2016 Tax Season. This was due to the fact that many DIY software users had received letters from the IRS of potential or real identity theft. 

So if you were one of those converts and you switched over to or are thinking of switching to a tax professional/ Enrolled Agent to prepare your taxes, know that tax professionals themselves are potential targets for ID thieves. These are some questions you should ask of them:

  • What are their data security policies?
  • How do they back up their data?
  • How is the data stored and is it at a safe location?
  • Do they encrypt their emails or do they use secure portals for exchange of sensitive information? If you have such a portal, make sure your password is very strong. Check how secure your password is here

I for one really appreciate these questions because I can show off all that I do to protect my clients' information.

Be alert, be savvy and take all necessary steps to keep your information under your control. If by some unfortunate circumstance, your ID does get compromised or stolen, here is a list of steps you can take. The list has been put together by the Federal Trade Commission for www.identitytheft.gov.

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As always, read my disclaimer here. Please consult an Enrolled Agent for your unique tax needs. More of my contact information is on my website, www.mntaxbiz.com.