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As tax season approaches, it’s crucial to remain vigilant against the growing threat of tax identity theft. Criminals are constantly evolving their tactics, aiming to steal your personal information and file fraudulent tax returns in your name. Protecting yourself in 2025 requires awareness, preparation, and action. This guide outlines key steps you can take to safeguard your tax identity and ensure a smooth filing process.
Understanding Tax Identity Theft
What Is Tax Identity Theft?
Tax identity theft occurs when someone uses your Social Security number (SSN) or other personal information to file a tax return and claim a fraudulent refund. Victims often discover the crime when their legitimate tax return is rejected because one has already been filed under their SSN.
Common Warning Signs
- Receiving an IRS notice regarding a suspicious tax return.
- Being unable to e-file your tax return because of duplicate filings.
- Unexpected account activity or notices of additional tax owed.
- Receiving tax transcripts or refund checks you didn’t request.
- Notifications about unemployment benefits you never applied for.
Steps to Protect Yourself in 2025
1. Safeguard Your Personal Information
Your personal information, especially your SSN, is the primary target for identity thieves. Protecting this information is a crucial first step in preventing tax fraud
- Store Documents Securely: Keep tax records and sensitive documents in a locked, secure location. Avoid carrying your Social Security card unless absolutely necessary.
- Shred Before Disposing: Use a shredder to destroy tax documents and credit card statements you no longer need.
- Avoid Oversharing: Be cautious about sharing personal information, especially on social media or over the phone. Scammers may pose as trusted organizations to extract details.
- Use Secure Wi-Fi: Avoid public Wi-Fi networks when accessing financial accounts or entering sensitive data.
2. File Your Taxes Early
Filing early reduces the window of opportunity for criminals to submit a fraudulent return using your information. By being among the first to file, you minimize the risk of your SSN being used improperly. Additionally, you gain the advantage of quicker refunds and peace of mind.
3. Use Strong Cybersecurity Measures
The internet is rife with scams and malware aimed at stealing sensitive data. Staying vigilant online can prevent your personal information from falling into the wrong hands.
- Secure Your Devices: Install antivirus software, keep it updated, and enable firewalls to protect against unauthorized access.
- Enable Multi-Factor Authentication (MFA): Add an extra layer of security to your online tax accounts by requiring a second form of verification.
- Beware of Phishing Scams: Avoid clicking on links in unsolicited emails or text messages claiming to be from the IRS. Instead, go directly to the IRS website to verify any information.
- Use Strong Passwords: Update passwords for your financial accounts regularly, using complex combinations of letters, numbers, and symbols
Securely Filing Your Tax Return
4. Choose Trusted Tax Preparation Methods
Whether filing on your own or using a professional, ensure your methods are secure.
- E-File with Verified Providers: Use IRS-approved e-filing software or platforms.
- Verify Tax Preparers: Choose preparers with valid credentials.
5. Use an IRS Identity Protection PIN (IP PIN)
The IRS offers an IP PIN to eligible taxpayers, providing an additional layer of security for filing returns.
- Visit the IRS Get an IP PIN Tool and follow the instructions.
Responding to Tax Identity Theft
6. Act Quickly if You Suspect Fraud
If you suspect that you are a victim of tax identity theft, take immediate action to minimize the damage.
- Contact the IRS: File Form 14039, Identity Theft Affidavit, to alert the IRS to the fraudulent activity.
- Monitor Your Credit: Place a fraud alert on your credit reports through agencies. Consider freezing your credit for additional security.
- Report to the FTC: Use the IdentityTheft.gov tool to report the incident and receive a recovery plan.
- Notify Financial Institutions: Inform your bank and credit card companies to prevent unauthorized transactions.
7. Work with Legal and Financial Professionals
In complex cases, seeking legal guidance can be invaluable. A firm like Walsh & Company can provide tailored assistance, helping you navigate the challenges of identity theft while ensuring your rights and assets remain protected.
Additional Resources and Best Practices
Keep Up with the Latest IRS Updates
Tax regulations and identity theft prevention measures evolve frequently. Stay informed by visiting the IRS’s Newsroom for updates on filing procedures, deadlines, and security alerts.
Integrate Identity Protection into Financial Planning
Integrating tax identity theft prevention into broader financial and legal strategies can offer greater peace of mind. Legal professionals at Walsh & Company can assist with tax planning and related services tailored to your specific needs.
Educate Yourself and Your Family
Encourage family members to adopt secure practices, especially if they are also filing tax returns. Awareness and education are key to reducing the risk of identity theft.
Conclusion
Tax identity theft remains a significant threat, but with proactive measures, you can effectively shield yourself and your financial security throughout 2025. By taking steps to safeguard your personal information, filing your taxes early, and staying vigilant for warning signs, you can substantially lower your risk. Recognizing the importance of timely action, maintaining secure habits, and seeking the right support can make a considerable difference.
If you suspect that you’ve fallen victim to tax identity theft or need advice tailored to your situation, reach out to trusted legal and financial professionals. Their guidance can help you navigate this challenge and protect your personal and financial well-being with greater confidence.
References
- Internal Revenue Service. “Taxpayer Guide to Identity Theft.” https://www.irs.gov/newsroom/taxpayer-guide-to-identity-theft.
- Internal Revenue Service. “When to File an Identity Theft Affidavit.” https://www.irs.gov/newsroom/when-to-file-an-identity-theft-affidavit.
- Internal Revenue Service. “Report Phishing.” https://www.irs.gov/privacy-disclosure/report-phishing.
- Internal Revenue Service. “Taxpayers and Tax Pros Beware of These Common Tax Scams.” https://www.irs.gov/newsroom/taxpayers-and-tax-pros-beware-of-these-common-tax-scams.
- Internal Revenue Service. “Dirty Dozen: Watch Out for Scammers Using Email and Text Messages to Try Tricking People During Tax Season.” https://www.irs.gov/newsroom/dirty-dozen-watch-out-for-scammers-using-email-and-text-messages-to-try-tricking-people-during-tax-season.
- Internal Revenue Service. “Get an Identity Protection PIN.” https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin.