Are you worried about identity theft-related tax fraud scams?
Our Retirement Daily’s Robert Powell caught up with Jeffrey Levine, CPA and tax pro from Buckingham Strategic Wealth Partners, to provide some guidance on identity theft as it relates to your tax return.
Video Transcript| Jeffrey Levine, CPA and Tax Expert, Buckingham Strategic Wealth
Robert Powell: What can be done to make sure you don’t become a victim of identity theft-related tax fraud scams? Here to talk with me about this is Jeffrey Levine from Buckingham. Jeffrey, welcome.
Jeffrey Levine: It’s good to be with you, Bob. So many different ways in which tax scams can occur. So we could spend the next several hours, Bob, talking about this. But at a high level, I think there are a few things that taxpayers can do to help give themselves the best opportunity to avoid scams. First off, whenever you are sending information to and from your tax professional, make sure that any information that you submit to a tax professional or that you store online is safeguarded through proper channels. It’s encrypted when you upload it. It’s encrypted when you send it. This way, if someone happens to access your email or gets it in transit, they’re not able to access your personal information.
Recommended Read: Identity Theft: What to Do if Someone Has Already Filed Taxes Using Your Social Security Number
Watch the video interview above, or read the video transcript below.
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It’s also important to know that the IRS is not calling you up to tell you that they’re going to knock down your door and take you to jail if you don’t pay. The IRS doesn’t operate like that. You should expect to get letters from them in the mail if you don’t pay. But no one is calling you up saying you didn’t pay. And if you don’t pay now we’re coming in with a SWAT team tomorrow. That’s not going to happen.
Thirdly, I would encourage folks to file as early as possible. Now, sometimes it’s not possible because you’re still waiting on information, but if you have all of your information available, filing early is actually one of the best ways to mitigate tax fraud, because what a lot of fraudulent filers do is they file as quickly as they can using someone else’s information. They request a refund, and then that refund gets paid out. And by the time the IRS realizes there’s an issue, well, it’s when you submit your real return, which now they reject because they say, hey, but we already have the return on file for you. So if you file first, when those fraudulent filers go to file, they’ll be the ones who get blocked and have to submit proof, which they don’t have that they’re actually really you. Whereas if you submit later, well then you’ve given them more time to file a return first using your information that can delay the processing of your return, delay any refunds you’re entitled to, etc. So that is an under-utilized but valuable way to mitigate the potential for fraud.
Robert Powell: Right, you mentioned that the IRS won’t be calling you. What about emails?
Jeffrey Levine: Chances are if you’re getting an email from the IRS, it’s not from the IRS. Yeah, be incredibly careful about clicking on things, links, etc., phishing attempts are up and it just takes going, clicking on one bad link can give a criminal someone like that access to take over your computer or access to that they can see or potentially install keystrokes observers to look and see what you’re typing in the future to get information and access to your password. So always be incredibly careful and diligent about sharing that material and about what you click on in your email.
Any questions? Call them directly, which I know can be a challenge, but that is always the safest way to go. So if an institution, not just the IRS, but if an institution calls you and asks for any information, you should say, I’m sorry, I don’t give that out over the phone to people who call me, then go look up the number of that institution. So even if it’s a bank or a credit union or something like that, if they call you, maybe you’re late on a payment. OK, thanks for letting me know. And I will call back that number that’s on the back of my credit card or what’s on your bank website. And then I will give the information so that I’m sure it’s a real authorized person who’s getting that.
Editor’s Note: The content was reviewed for tax accuracy by a TurboTax CPA expert.
Zach Faulds contributed to the writing of this article and produced the video and/or the graphics associated with it.
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