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Income Tax Fraud: File Early to Reduce Your Risk

Sep 27, 2017, 10:51 AM

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Income tax fraud is on the rise. According to CNBC, the total amount stolen from taxpayers may hit $21 billion in 2016, up from “just” $6.5 billion in 2013.

Federal and state agencies have invested in new technology to thwart fraudsters, but security reporter Brian Krebs reports identity thieves are already testing those defenses.

Why is the problem so bad? LifeLock’s expert Nada Baiz says a big reason is because filing a fraudulent tax return is relatively easy. All you need is a name, date of birth and Social Security number. That’s it! All of the other details— address, employment, salary and refund information —can be made up by the criminal.

Baiz says with all the data breaches we’ve seen lately, criminals can easily find the necessary sensitive information—possibly yours—to file a fraudulent return. Here are a couple of tips that’ll help you get through tax season unscathed:

• The best preventive measure against income tax fraud is to beat the criminal to the punch. File your income taxes ASAP. That way, the fraudster will be the one receiving the message that the IRS already accepted a tax return with your Social Security number.

• Do your homework and research your CPA or your tax prep software. You want to be sure you are filing taxes with a trusted professional tax preparer— one who is properly licensed and has a positive clientele history. The same is true for the software that you are using. Make sure it follows safety protocols.

Take advantage of LifeLock’s protection plans. As a proud supporter of National PTA, LifeLock is offering all PTA members and their families a very special offer. Learn more about the offer.

You can also visit the Identity Theft Resource Center and Internal Revenue Service websites for additional resources.

Cory Warren is the blog editor of LifeLock UnLocked.