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How Can I Avoid Tax-Related Identity Theft?

Posted on in Estate Planning

Elgin, IL tax planning lawyerThe first few months of every year are known as “tax season,” and during this time, many taxpayers compile their financial information and prepare to file their tax returns, which are due on April 15th. Unfortunately, many taxpayers may become the victims of identity theft during this time. If a taxpayer’s personal information is compromised, scammers may file fraudulent tax returns in their name, access their accounts, or use their information to open new accounts or obtain employment. A person’s identifying information may also be used to file false unemployment claims (we will be providing more information about this type of identity theft in an upcoming blog). However, families can take steps to prevent identity theft as a part of their larger wealth protection strategy.

Signs of Identity Theft

Scammers may use a variety of methods to obtain a taxpayer’s personal information, such as calling a person, claiming to be an IRS agent, stating that the person owes money, and asking for details such as bank account numbers or the person’s Social Security number. They may then use this information to file a tax return and claim a refund in the person’s name.

A taxpayer may have been the victim of identity theft it:

  • They receive notice from the IRS about a tax return that they did not file or stating that an account has been created in their name.

  • They are unable to file a tax return electronically because another return has already been filed for their Social Security number.

  • IRS records show income from a source other than the person’s employer.

Protection Against Identity Theft

The IRS has taken steps to protect taxpayers’ personal information by allowing them to create an Identity Protection PIN. This number, which is only known to a taxpayer and the IRS, will ensure that nobody else can file a tax return using the person’s Social Security number. Taxpayers who had previously been the victim of identity theft will receive a PIN each year. Other taxpayers can opt in to this program, and they will be required to complete an identity proofing process. A new PIN will be issued each year to ensure that a taxpayer’s information is safe and secure.

Taxpayers can also take other steps to protect their personal information and avoid identity theft. These measures include using strong passwords and multi-factor authentication, ensuring that encryption is used when submitting information online, and using up-to-date security software on computers and electronic devices. Taxpayers should also be on the lookout for scams and avoid providing any personal information to people or companies that they do not fully trust.

Contact Our Elgin Wealth Protection Attorneys

If you are concerned about tax-related identity theft, or if you want to make sure you have a wealth protection strategy in place that will address tax issues and provide for your family’s needs in the future, Ariano Hardy Ritt Nyuli Richmond Lytle & Goettel, P.C. can provide the legal help you need. To learn more about how we can address your financial concerns, contact our Kane County estate planning lawyers at 847-695-2400 and set up a free consultation today.

Sources:

https://www.irs.gov/newsroom/taxpayer-guide-to-identity-theft

https://www.consumer.ftc.gov/features/tax-identity-theft-awareness

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