In the wake of several high profile data breaches in the past year, it won’t be surprising to see a sharp increase in tax fraud this tax season. In fact, it’s started already: Several states, including Vermont, recently halted personal income tax refunds as they scramble to work with online tax preparation vendors in attempt to combat tax fraud.
Last year, Vermont was forced to halt personal income tax refunds as they scrambled to work with online tax preparation vendors in attempt to combat tax fraud.
Tax fraud can occur anytime an identity has been compromised. If a fraudster has access to an individual’s basic personal information, such as their address and social security number, they can successfully e-file or mail false tax claims. The fraudsters typically claim little taxable income, few deductions, and many credits in order to receive a large refund. The affected individual is unaware of this fraud until months later when they receive a letter from the IRS, or they try filing their legitimate tax return.
While it’s almost impossible to entirely protect yourself from identity theft, there are a few things you can do to avoid being a victim of tax fraud:
- Don’t wait until the last minute; file taxes as soon as possible. The sooner you file your taxes, the less time the fraudsters have to make a false claim using your identity.
- Use a trusted, certified accountant or reputable tax preparation software to file your taxes.
- Beware of tax-related spam emails, text messages and phone calls. Many spammers attempt to steal personal information by impersonating the IRS, claiming you owe them money. You can forward these to the IRS at firstname.lastname@example.org.
If you think you’ve been a victim of tax fraud, the IRS has a comprehensive webpage with information on what you need to do.
Brendan Chamberlain is an Identity and Access Architect on the Information Security team at The University of Vermont Medical Center, where he works hard to enhance the security of the network’s sensitive information.