With the new tax season coming fast, taxpayers are concerned about the surge in identity theft cases. Last year, the Internal Revenue Service paid out an estimated $5.2 billion in fraudulent tax refunds, according to a report by the Government Accountability Office. As the government tries to combat identity theft and tax return fraud, consumers could take these steps to protect their identities:
1. Lock Your Mailbox
While you probably think most identity thieves strike online or over the phone, they are also known to target your mailbox. Using the information found in the mail, they could access your Social Security number or other sensitive data. During tax season, mailboxes may be especially vulnerable because employers send W-2s containing personal information that could be used for fraudulent tax returns. One of most basic precautions you can take is to lock your mailbox. This will prevent thieves from opening it and helping themselves to your information, according to a report by AARP Washington.
2. Sign Up for Fraud Alerts
If you have been an identity theft victim in the past, placing a fraud alert on your credit report could help prevent your accounts from being used for fraud. Call one of the three credit reporting companies - Experian, Equifax and TransUnion - and request a fraud alert on your account. The fraud alert works by requiring businesses to contact you about any new accounts that are opened either by you or an identity thief, according to the Federal Trade Commission.
3. Check Your Credit Report
In case you suspect your identity is stolen during the tax season, be sure to review your credit history to determine whether an identity thief has used your identity to open an account with a credit card provider, utility company or cable provider. Often, identity thieves may use your information for more than tax return fraud and there could be suspicious purchases or new lines of credit that appear on your credit report.
4. Do Not Respond to Unsolicited Requests for Personal Information
The IRS cautions taxpayers against replying to requests for personal information, even if they are supposedly from the agency, according to IRS' site.
"Taxpayers should be on the lookout for tax scams using the IRS name," said IRS Commissioner John Koskinen. "These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues."
The IRS said taxpayers should give out their information only if they were the ones who contacted the agency or if they know the exact identity of the person on the other end of the line.