In the craze of tax season, it’s important to be aware of the dangers of identity theft and tax fraud. Here is some information you might find useful this tax season.
Taxpayers are not doing what’s necessary to protect themselves from tax fraud that is identity theft related and most of them are not expecting it to occur to them, according to a recent study. There was a survey completed by security company IDT911. It found that 63% of Americans are not taking identity theft seriously and think “it could never happen to me,” not reasoning their identity could be stolen this tax season, even with the high-profile data breaches including the Internal Revenue Service.
Nineteen percent have said that they have not ensured their Wi-Fi network is password protected when filing their taxes online, and 49% stated that they don’t lock their mailbox when expecting their tax refund in the mail, which could expose sensitive personal and financial information to cybercriminals. Over a third (38%) of the 1,500 consumers surveyed stated they’re not sure how to vet a tax preparer, including 92% of millennials aged 18 to 34. More than half of the respondents (52%) said they don’t trust or are unsure if they trust online tax services, probably due to the latest data breaches of multiple businesses.
Despite the increase in tax-related identity theft, 48% of those surveyed still think that the holiday shopping season is the riskiest time of year. Tax-filing season was next at 30%. Just 12% planned to file taxes in January even though experts advised consumers to file as early as they possibly can to beat out identity thieves who could potentially claim their tax refunds.
“Tax season has become fraud season,” stated IDT911 chairman Adam Levin. “As breaches have become the third certainty in life, cyber-criminals can glean information from literally hundreds of millions of compromised records to target consumers in tax-related identity theft and phishing schemes. In today’s dangerous digital world, each of us must be vigilant and remain on high alert”. IDT911 said its fraud center noticed a 154% increase in tax-related cases from 2014 to 2015, with 2016 not showing signs of slowing down. Tax refund fraud losses could reach $21 billion by 2016, according to the Treasury Inspector General for Tax Administration, and the Federal Trade Commission recently said that it had a 47% increase in identity theft complaints in 2015, with tax refund fraud being by far the biggest factor. These numbers are expected to go up if the proper precautions are not used.
Many Americans may not know where to go when they are eventually impacted by identity theft during tax season. More than a third of those surveyed (38%) are not sure if their financial services or insurance providers have identity theft or fraud protection services. Most respondents (57%) replied that their financial institution would be the first entity they would contact once they found that they were the victim of a data breach.
Source: Accounting Today
Photo courtesy of freedigitalimages.net/stuartmiles
