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Tax Time Brings Risk of Fraud and Identity Theft: Know the Signs

23 February 2018

Tax Time Brings Risk of Fraud and Identity Theft: Know the Signs

Tax Identity Theft Awareness Week has come and gone, but as a taxpayer it is critical you are well familiarized with the importance of personal identification protection. This is particularly concerning throughout this time of year when taxes are being collected and processed.  Recent studies showcased that there was an astounding 400% increase in tax-related phishing attacks in the 2016 filing season. In an effort to stop this staggering rise in attacks, the Federal Trade Commission urges taxpayers to educate themselves on the most common tax scams that take place today. At National Records Centers, we wanted to share these details with our clients in hopes that we can steer you in the right direction when it comes to protecting your identity through professional document shredding solutions.

identity theft signs

How Do Tax Fraud Cases Take Place?

All it takes is stolen details pertaining to your identity; if somebody gains access to your name, address, date of birth and sensitive information like your Social Security number or financial statements, a criminal can use these personal facts to their advantage such as for job seeking or with the intention of filing taxes under your name to collect a tax return.  Let’s review some of the most common scams and ways in which you can secure private data and avoid falling victim to these.

The priority to secure personal information so that it does not land into the hands of tax thieves and cybercriminals should be at the top of your list year round. In relation to protecting yourself against these attacks, nothing is more effective and critical than understanding common objectives and the scams and tricks that are usually implemented to carry out the crime.

Common Scams Related to Tax Fraud

Email Scams

Hackers often use fake credentials when identifying themselves, whether it is through a suspicious email account or a superior title; these email scams are in effort to gather personal identification data from you. The purpose behind these scams is so that hackers can represent themselves as members of the IRS, reaching out to you to request personal information that will of course be used to commit identity theft and/or fraud.  Know this important fact: The IRS will never contact you through email, show up at your home or office, or call you to speak to you about certain tax matters. The only method of communication that will come from the IRS is through direct mail. With this in mind, refrain from offering information to anyone claiming they are from the IRS through any other method of communication.

W-2 Phishing

Recently W-2 phishing attacks have grown in number. If you don’t understand this scam, it is basically when cybercriminals probe a business for private details about an individual employee. For example, using stolen or made-up credentials from a CEO, hackers can email other employees in management such as those in the HR department, asking for personal information and W-2 financial statements of an staff member. After collecting this, cybercriminals can gather the returns and in essence ruin your financial record, causing substantial financial damage; not to mention unnecessary stress.  If you manage employee information, it is your legal responsibility to make sure that it remains protected as well. Never provide answers to any email requests relating to tax or W-2 information. Unfortunately there are very few warning signs of Tax Identity Theft, so the IRS will contact you if there are any unauthorized or suspicious activities revealed while processing your taxes.

To properly address any matters in a timely approach, the IRS will contact you through mail when:

  • There has been more than one tax return filed using your Social Security number.
  • You owe additional taxes or have had collection actions taken against you for a specific year you did not file a tax return.
  • The IRS has witnessed that you’re receiving wages or income from an unknown employer.

The document shredding services we offer at NRC will ensure that your confidential records such as financial documents are destroyed with the highest level of security measures. Shredding your old tax forms is the only disposal method that guarantees your data is unrecoverable and safe from potential theft. Be sure to partner with a professional document shredding company for the best results in protecting yourself from fraud and identity theft.

Contact us today in Dallas, 877-672-6584