Tax Season Identity Theft Threats

Filing taxes involves sharing sensitive personal and financial information which has made the months, weeks, and days leading up to tax day a prime time for identity thieves ready to strike. Understanding the risks and taking action to stay protected is more crucial than ever. 

The following information will help you and your union members avoid tax-related identity theft and implement strategies for personal protection.

How Tax Season Opens a Window of Opportunity for Identity Thieves

The exchange of sensitive data when filing taxes, from Social Security numbers to financial records, can lead to unauthorized access and fraudulent use of personal information. Thieves have improved their tactics, using phishing emails, fake tax preparation services, and malware to gather personal information. Recognizing these tactics is the foundation of effective prevention. 

Signs of Tax-Related Identity Theft

The signs of tax-related identity theft can be subtle but detectable. These include:

• Receiving IRS notifications for unfiled tax returns.
• Being unable to file electronically due to a duplicate Social Security number submission.
• Noticing unauthorized transactions and accounts on your financial statements.
• Early detection is pivotal, enabling individuals to act swiftly to reduce the impact.

Steps to Protect Yourself from Identity Theft When Filing Taxes

Enhancing personal security during tax season involves several critical steps:

• Secure Internet Connection: Always use a secure, encrypted internet connection when filing taxes online. Public Wi-Fi networks should be avoided due to their low security and vulnerability to identity thieves.
• Strong Passwords and Two-Factor Authentication: Create complex passwords for all tax-related and financial accounts. Employ two-factor authentication wherever possible to add an extra layer of security.
• Phishing Emails: Be vigilant and do not respond to emails asking for personal or financial information.
  IRS Communication: Be aware that the IRS never initiates contact with taxpayers via email, text messages, or social media channels to request personal or financial information. Any such communication attempts should be considered phishing scams.
• Personal Information Management: Be judicious about where and how you share personal information. Shred documents containing sensitive data before disposal. Regularly monitor your credit reports and financial statements for signs of unauthorized activity.
• Tax Professional Verification: If employing the services of a tax preparer, ensure they are reputable and IRS-certified. Check their credentials and read reviews from previous clients to avoid scams.
• Use of IRS Identity Protection PINs (IP PINs): All taxpayers who can verify their identities are eligible for an IP PIN a 6-digit number that provides additional protection for your Social Security number on your tax return.

You can view all of the advice from the IRS on avoiding identity theft here.²

What to Do If You're a Victim of Tax Identity Theft

Discovering you're a victim of identity theft requires immediate action:

• IRS Notification: Contact the IRS immediately if you suspect or know that your personal information has been compromised. They can take steps to secure your tax account.
• Federal Trade Commission (FTC) Report: File a report with the FTC at IdentityTheft.gov. The FTC provides a recovery plan and assists in taking necessary steps to repair identity theft.
• Credit Bureau Alerts: Contact the three major credit bureaus—Equifax, Experian, and TransUnion—to place a fraud alert on your credit reports. Consider freezing your credit to prevent new accounts from being opened in your name.
• Account Passwords: Change passwords for all online accounts, especially those related to banking and taxes.
• Follow-Up: Continue to monitor your credit report and financial statements long after the theft has been addressed to catch any delayed fraudulent activity.

The Threat Becomes More Real Each Year

The threat of identity theft during tax season is real and growing. By understanding the risks, recognizing the signs, and implementing protection strategies, you can minimize the risk of becoming a victim. Vigilance and proactive measures are key to safeguarding your financial well-being in the digital age. Stay informed, stay secure, and take control of your personal and financial information.

For early alerting and $1 million identity theft protection, the Member Resources Legal and Personal Protection Plan is a great way to protect you and your members from identity theft. Visit our website for most information.

1. IRS flagged more than 1 million tax returns for identity fraud in 2023 by Greg Iacurci
2. Identity Theft Central from the IRS

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