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FTC: 4 in 10 ID Theft Cases Involve Tax Fraud

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By Admin on March 04, 2013 11:34 AM

Identity theft is still on the rise, and the fastest growing category of reports involves tax fraud. In fact, tax fraud accounted for 43.4% of ID theft cases in 2012, according to the Federal Trade Commission.

Last year also saw the highest number of ID theft cases ever reported: more than 369,000 incidents. That means a lot of people were dealing with tax fraud issues last year that weren't their fault.

Some forms of ID theft are hard to prevent, but the silver lining to tax-related fraud is that there are steps you can take to minimize your risk. For example:

  • Choose a tax preparer you trust. Doing taxes can be complicated, and at some point you may need to get someone to do it for you. But you need to be careful about whom you choose. Your tax documents contain a lot of very personal information and if your preparer isn't above board or at least careful about record storage, that could be the way your information leaks out. It may be better to hire a lawyer to help with your taxes, or at least recommend a trustworthy accountant.

  • Keep your Social Security number to yourself. There are very few situations when you need to divulge your Social Security number. Your boss needs it for tax paperwork. the DMV needs it in order to issue your license, and banks need it when you open a new account. But many other entities, like that website you just clicked on, do not need your SSN and you shouldn't give it out. Keep it private because if it gets into the wrong hands, it could be years before you realize your identity was stolen.

  • The IRS is not emailing you. It's intimidating to get an email from someone who claims to be the IRS, but if that person is asking you to send information online, it's not the IRS. Scams like this happen and it's not just someone pretending to be from the IRS. Scammers can impersonate your bank, your credit card company, or a government agency. You're typically asked to send them some personal information, like your Social Security number, to clear up some problem. But remember, no one good ever needs your Social Security number via email. Keep your personal information safe, and you may be able to outsmart identity thieves during tax time.

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