YouTube

Spotify

Resources

IRS Publication 17 (2024)

Show Notes

Seizing Financial Control: A Guide to Protecting Yourself from Identity Theft

Welcome to Safe Simple Sound - Tax Edition! This webpage expands on our podcast episode dedicated to protecting your financial well-being from the devastating effects of identity theft. We'll guide you through practical steps, real-life scenarios, and valuable resources, empowering you to create a financial safety net. This information is based on IRS Publication 17, a crucial resource for safeguarding your finances.

SSN Protection and Tax-Related Identity Theft

Your Social Security Number (SSN) is the key to your financial identity. Protecting it is paramount. This section explores two common scenarios:

The Stolen SSN

Imagine receiving a hefty tax bill for income you never earned. This nightmare scenario can indicate a stolen SSN. Panic is a natural first reaction, but swift action is crucial:

• Immediate Steps:
  • File a police report: This creates an official record of the theft.
  • Place a fraud alert: Contact one of the three major credit bureaus (Equifax, Experian, or TransUnion) to flag your credit reports.
  • Consider a credit freeze: This restricts access to your credit reports, making it harder for thieves to open fraudulent accounts.
• Contacting the IRS: While the steps above are crucial for damage control, contacting the IRS is your next priority. Complete Form 14039, the Identity Theft Affidavit, and gather supporting documents like previous tax returns. Meticulous record-keeping of all communication is essential.
• Proving Your Innocence: The police report and Form 14039 are key pieces of evidence. The IRS has specific procedures for handling identity theft cases. Provide them with all necessary documentation to build a strong case.

Call to Action: Visit IRS.gov/IdentityTheft and contact the IRS immediately if you suspect your SSN has been compromised.

The Tax Preparer Scam

Choosing a trustworthy tax preparer is crucial. Unfortunately, some individuals exploit this trust for personal gain.

• Choosing a Trustworthy Preparer:
  • Verify Credentials: Ensure the preparer has a Preparer Tax Identification Number (PTIN). Check their standing with professional organizations.
  • Check Reviews: Online searches can reveal a lot about a preparer's reputation.
  • Beware of Red Flags: Unusually low fees or promises of excessively large refunds are often warning signs.
• Recourse if Victimized:
  • Contact the IRS: Report the fraudulent activity immediately.
  • File a Police Report: Document the incident with law enforcement.
  • Contact the FTC: The Federal Trade Commission can also provide assistance.
  • Report to the IRS Office of Professional Responsibility: Hold the fraudulent preparer accountable.
• Mitigating Damage: Place a fraud alert or credit freeze on your credit reports. Consider contacting the Taxpayer Advocate Service (TAS) for further assistance.

Call to Action: Research and vet tax preparers thoroughly before sharing sensitive information. Report suspicious activity to the appropriate authorities.

Phishing and Email Scams

Phishing scams are a constant threat. This section covers two common scenarios:

The Fake IRS Email

The IRS never initiates contact via email. Any email claiming to be from the IRS is a red flag.

• Common Red Flags:
  • Unsolicited Contact: The IRS communicates primarily through regular mail.
  • Sense of Urgency: Phishing emails often use threatening language and tight deadlines.
  • Poor Grammar and Spelling: This is often a giveaway of fraudulent emails.
• Verifying Legitimacy: Check the sender's email address (it should end in ".gov"). Be wary of requests for personal information—the IRS will never ask for sensitive information via email.

Call to Action: Never click links or provide personal information in response to unsolicited emails claiming to be from the IRS. Forward suspicious emails to phishing@irs.gov.

The Compromised Account

Clicking a malicious link can compromise your accounts. This scenario explores how to protect yourself and recover from such a breach.

• Protecting Your Business:
  • Strong Anti-virus/Anti-malware Software: Essential for detecting and quarantining malicious files.
  • Employee Education: Regular training on phishing tactics can prevent costly mistakes.
• Recovery Steps:
  • Contact Your Bank and Credit Card Companies: Freeze accounts to limit potential losses.
  • Change Passwords: Prioritize financial accounts and email.
  • Report the Incident: Contact the FTC and other relevant authorities.

Call to Action: Install anti-virus software, be cautious about clicking links in emails, and regularly monitor your financial accounts.

Identity Protection PIN (IP PIN) and Taxpayer Advocate Service

This section covers proactive and reactive approaches to identity theft:

Proactive Protection with IP PIN

The IP PIN is a six-digit code that adds an extra layer of security to your tax return, preventing fraudulent filings.

• Benefits: Protects your SSN from being used for fraudulent tax returns.
• Eligibility: Available to all taxpayers.
• How to Get One: Apply online through the IRS website's "Get an IP PIN" tool. Verify your identity through a secure process.
• Using Your IP PIN: Enter it when filing your taxes each year. Keep it secure and confidential.

Call to Action: Visit IRS.gov/IPPIN to learn more and apply for an IP PIN.

Seeking Help from TAS

The Taxpayer Advocate Service (TAS) assists taxpayers with unresolved tax issues, particularly those facing hardship due to identity theft.

• TAS Services: Advocates for taxpayers within the IRS, helping resolve complex tax problems.
• Eligibility: Based on financial hardship and unsuccessful attempts to resolve the issue through normal IRS channels.
• Contacting TAS: Call their national helpline at 877-777-4778 or visit a local office. Have all relevant documentation ready.

Call to Action: Contact the Taxpayer Advocate Service at 877-777-4778 if you're experiencing unresolved tax issues related to identity theft.

Conclusion

Protecting yourself from identity theft requires proactive measures and vigilance. By understanding the risks, implementing preventative steps, and knowing where to turn for help, you can safeguard your financial future. Remember, you're not alone in this.

Need personalized guidance? Contact us at SafeSimpleSound.Com/contact.