The good news according to the IRS is that their crack teams of forensic accountants prevented the payments of 1.5 billion dollars in fraudulent tax refund checks last year. The bad news, however is that a report done for the Treasury Department predicts that the IRS will pay more than 21 billion dollars in fraudulent tax refund checks over the next five years. Even worse news is that if an identity thief manages to file a tax return using your name and Social Security number before you do, it could be well over a year before you get your legitimate tax refund. Tax identity theft is getting worse, not better and you can’t depend on the IRS to protect you. Identity thieves who manage to steal your name and Social Security number are filing early returns with phony W-2s and getting huge refunds while your refund gets stuck in bureaucratic hell when you file your legitimate tax return.
Their are several keys to protecting yourself from tax identity theft. First, file early and beat the identity thieves to the punch. Second, keep your personal information, particularly your Social Security number as protected as possible. Identity thieves will often try to trick you into providing your Social Security number as when they tell you that you have won a contest that you have never entered and need your Social Security number for reporting purposes. Protect your computer’s security with a strong firewall and security software that is constantly updated. Don’t click on links or attachments unless you are sure they are legitimate. This is a primary way that identity thieves install keystroke logging malware on your computer through which they can steal all of the information from your computer.