Risk Management

Protecting Personal Data During Tax Season

Protecting Personal Data During Tax Season 150 150 Risk Management

Protecting Personal Data During Tax Season

Tax season presents a tremendous opportunity for criminals seeking monetary gain from identity theft. The Internal Revenue Service (IRS) reported in 2021, 90% of tax returns were filed digitally, and with such a large majority utilizing digital filing, it is imperative to stay vigilant to avoid falling victim to identity theft resulting in the loss of personal data.

According to the Federal Trade Commission (FTC), an imposter posing as an IRS employee is one of the top five government scams. Scammers will email or call victims pretending to be IRS employees, clients, colleagues, or tax preparers to phish for valuable personal information, email malware via links or attachments, or even request payment for back taxes.

Another prevalent scam is Tax Identity Theft in which someone files a tax return using a victim’s Social Security Number (SSN) to steal their tax refund. In 2021, there were approximately 111,700 Tax Identity Thefts reported.

Financial software firm, Intuit, a TurboTax maker, recently warned customers of a phishing campaign in which scammers emailed impersonating the company and threatened to close user accounts. The emails appear to originate from Intuit Accountants but were sent from other hacked email servers.

Important steps to keep your personal tax information safe:

  • Keeping tax documents organized and stored safely: Establish a secure place for all tax-related documents such as a fireproof safe or lockable cabinet, and encrypt the digital copies of tax information stored on hard drives.
  • Be careful when sharing sensitive data: The IRS initiates most contact through physical mail delivered by the United States Postal Service and not via phone or email. Be wary when receiving suspicious calls, texts, or emails asking for personal information in connection to your taxes.
  • Request an Identity Protection PIN: The Identity Protection PIN is a six-digit number assigned to eligible taxpayers used to verify their identity when submitting their federal tax forms. It helps to prevent identity thieves from filing fraudulent tax returns with stolen SSNs.
  • Securely disposing of your old tax documents: Always dispose of old paper returns in a way that ensures no one else can recover information from these documents.  Use a cross-cut shredder or utilize a professional shredding service to shred any documents containing sensitive information before tossing them.
  • Stay up to date: Be sure to update your operating systems and software to fight against cybercrime and stay informed about the various scams that are popping up.

For early warning signs of scams and steps to be taken following identity theft, visit the FTC, and for updated list of scams visit latest IRS Tax Scams .