Protecting yourself from identity theft and tax fraud.

By Peter Recchia, CPA, AIF

May 12, 2015

During the course of 2015 we have seen many clients and other CPA firms talk about identity theft and how it has affected them and their tax filings. According to the Bureau of Justice Statistics Research over 16.6 million people per year will be affected by identity theft. It places a burden on its victims, clients, tax preparers, business and many organizations. Tax- related identity theft will most likely occur when someone has obtained your name and social security number and has filed a tax return with the intention of claiming your refund. In most cases, you will not be aware of this until you are electronically filing your tax return for the current year.

Some of the best ways to avoid your personal information being stolen is to make sure your tax documents are being sent to you in the most secure fashion. Electronic transactions with any of your financial accounts that are completed with care and have the proper safeguards in place are still much more secure than sending a paper return or your paper tax documents through the mail.

Here is 4Wealth's tip sheet on how to better protect your identity and tax documents from fraud.

Remember, the IRS does not initiate contact with taxpayers by phone or email to request personal or financial information. Don’t give any personal information over the phone, through the mail or the Internet unless you have initiated the contact or are sure you know who is asking on the other end.

By taking these small steps you can protect yourself from identity theft in the future.

How do you report identity theft to the IRS?

  • Contact the Identity Protection Specialized Unit at 1-800-908-4490.
  • Complete form 14039, Identity Theft Affidavit and mail or fax to the IRS per the instructions.
  • Always continue to file and pay your tax return, even if you are forced to mail in a paper copy of the return.

Email Peter if you need guidance.

This article was featured in 4SIGHT. Sign up free to receive 4SIGHT, our monthly newsletter of helpful financial articles, tips, events, and monthly IRS deadlines. 



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