April 4, 2023
How to Protect Yourself from Online Tax Fraud
In 2022, there were nearly 7.8 million reports of suspicious activities related to taxpayer returns according to the Identity Theft Tax Refund Fraud Information Sharing Mission & Analysis Center, a partnership between the IRS, companies and states. Most of these suspicious activities related to online tax fraud. So how can taxpayers protect themselves from online tax fraud and scams?
Many Greenleaf Trust clients work directly with a tax professional to prepare and file their taxes. This positions them well; however, others also leverage online tools like TurboTax to prepare and file their own taxes. As Chief Information Officer, I often receive questions about using these online tools. While filing taxes online may be an easy, efficient and a cost effective way to complete this yearly task that most of us dread, it can also increase your risk of falling victim to tax fraud. Tax fraud can lead to a host of problems including identity theft, financial loss, and legal issues. However, there are steps you can take to protect yourself from online tax fraud. In this article, we will discuss some of the best ways to safeguard yourself from these threats.
Use a Trusted Tax Preparation Service
One of the most important things you can do to protect yourself from online tax fraud is to use a trusted tax preparation service. When selecting a service, look for reputable companies with a long history of providing quality services. Avoid tax preparation services that are new or have a poor track record.
Secure Your Personal Information
Another key step in protecting yourself from online tax fraud is to secure your personal information. This includes using strong passwords, avoiding public wi-fi networks and never sharing your Social Security number or other sensitive information online.
Keep Your Software Up to Date
Keeping your software up to date is another important way to protect yourself from online tax fraud. Hackers are always looking for vulnerabilities in software and systems, so it’s critical to stay on top of software updates and security patches. Make sure to install updates as soon as they become available.
Beware of Phishing Scams
Phishing scams are a common tactic used by fraudsters to steal personal information. These scams typically involve an email or phone call from someone posing as a legitimate business or government agency. The message will often ask for personal information or direct you to a fake website. Always be cautious when sharing personal information online, and never click on links or download attachments from unknown sources.
Check Your Credit Report Regularly
Regularly checking your credit report is another important step in protecting yourself from online tax fraud. This can help you spot any unauthorized activity on your accounts and take action to stop it. You can get a free credit report from each of the major credit bureaus once a year. Take advantage of this service, and review your reports for any suspicious activity.
File Your Taxes Early
Finally, filing your taxes early can help you avoid online tax fraud. By filing early, you reduce the amount of time that your personal information is vulnerable to hackers. In addition, if someone does try to file a fraudulent return in your name, the IRS will be more likely to catch it if you have already filed your legitimate return.
In conclusion, protecting your personal identifiable information is of the utmost importance if you decide to prepare and file your taxes yourself online. By following the above listed recommendations, you can greatly reduce your risk of falling victim to tax fraud. Remember to always be vigilant and cautious when sharing personal information online and take immediate action if you suspect that you have been a victim of fraud.