How Your CPA Can Help Stop Identity Theft

The thought of identity theft is scary, but during tax season, identity theft becomes a nightmare for almost 450,000 people, and it is increasing every year. The IRS processes 145 million returns in a year. Almost 109 million of the claims are refunds, and average $3,000. This makes tax returns a prime target for any would be thief. It is important to know how to protect yourself during tax season to prevent the worst from happening.

Identity theft has devastating consequences. It will delay taxpayer refunds, victims may lose job opportunities, be refused for loans, housing, cars, and can even be arrested for crimes that they did not commit. The most common ways thieves obtain information is through email or phone phishing and dumpster diving. Thieves are looking for personal information, such as, bank records and credit card receipts.

If your identity is stolen, several steps should be taken. First, file a report with the police. Close any bank or credit cards accounts affected. Inform credit bureaus and consider freezing credit accounts. A freeze restricts access to the credit reports and prevents thieves from opening other accounts with the stolen information. The IRS has a form (Form 14039) that needs filled out if your identity was stolen anytime during the year. Make sure that you answer all IRS notices immediately, using the name and number printed on the notice.

To prevent identity theft, shred any mail that has personal information on it before throwing it away. Watch credit reports from the three major credit bureaus. If working with a CPA, forward any emails that appear to be from the IRS to them and do not click on any of the links before forwarding the email. Keep your SSN safe; do not give it out, store the card in a secure place. Protect your home computer with firewall, anti-spam, and anti-virus software and update regularly. Change passwords to bank and credit cards sites regularly.

None of this is a guarantee that your identity is safe, but the more you safeguard your personal information the better chances you have of not being a victim.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.