5 Tips for Protecting Your Tax Refund From Fraudsters
January 27, 2020
Benjamin Franklin once said, “Nothing is certain except death and taxes.” But just as you can count on tax time happening each year, you can be certain there will be scammers trying to steal your personal information and tax refund.
From February 3 – February 7, 2020, it's Tax Identity Theft Awareness Week. Tax identity theft happens when someone steals your Social Security number (SSN) or other personal information to file a phony tax return and receive a refund. As an advocate for the taxpayers of South Carolina, I wanted to bring attention to this year’s observance and offer resources to help you learn more about spotting potential scams and fighting imposters’ attempts of stealing your information.
Our state was recently ranked at number five in a list by WalletHub for States With the Most Identity Theft and Fraud, highlighting the importance of taking the extra steps necessary to protect yourself and your information. To curb the threat of tax-related identity theft this filing season – and year-round – keep in mind the following tips:
#1. File your tax return early.
Oftentimes, people do not know they’re victims of tax identity theft until their return is rejected as a duplicate filing or the Internal Revenue Service (IRS) notifies them via mail of suspicious activity. Filing early helps limit this risk, as it gives scammers a shorter timeframe to file a fraudulent return using your information. By filing your legitimate return early, identity thieves won’t be able to try and steal your refund later. Find information about filing options at dor.sc.gov/iit-filing.
#2. Choose your tax preparer wisely.
Most tax return preparers provide outstanding and professional tax service. However, each year, some taxpayers are hurt financially because they choose the wrong tax return preparer. If you plan to pay someone to help prepare your taxes, do diligent research in advance and choose wisely, as you’ll be sharing with them your most personal information, including details about your marriage, income, children, social security number and overall financial picture.
#3. Know the signs of an IRS imposter.
Scams take many shapes and forms, which is why it’s important to know the signs of a legitimate IRS communication and the signs of a scam. For example, there’s a common phone scam where IRS impersonators call taxpayers, saying they owe money and must pay right away. However, the real IRS does not initiate contact via phone and will never call you demanding money. By familiarizing yourself with common IRS imposter scams, you’ll empower yourself with the knowledge to thwart fraudsters’ attempts at identity theft. You can find information about recent and prevalent tax scams on the IRS website.
#4. Protect your personal information.
You can only control what happens to your personal information as long as it’s in your possession. Be diligent in storing documents that contain sensitive financial information in a secured location. Once you no longer need them, shred them. Use the IRS publication Security Awareness for Taxpayers as a reference for additional steps you can take to protect yourself from identity thieves.
#5. Ensure your computer is protected.
The South Carolina Department of Revenue (SCDOR) recommends filing online using a reputable provider – it’s fast, accurate, and secure. But you still need to be proactive about protect your information by ensuring your computer is protected. When dealing with financial or sensitive information, only use secure, protected Wi-Fi networks – never public Wi-Fi networks – and only give personal information over encrypted websites, which you can identify by the “https” web address prefix. Utilize the SCDOR Cyber Security Awareness resource center, which offers pertinent information about protecting yourself online.
Curtis Loftis is the South Carolina State Treasurer. As Treasurer, he is the state’s "private banker,” managing, investing and retaining custody of nearly $50 billion in public funds.
If you believe your information has been compromised, you can contact the IRS Identity Protection Specialized Unit at 1-800-908-4490, or visit IdentityTheft.gov.
The South Carolina Department of Revenue (SCDOR) is the state agency responsible for the administration and regulation of tax laws in South Carolina. If you suspect or know of an individual or company that has committed tax fraud in South Carolina, or if you think you may be a victim of identity theft that has led or could lead to tax fraud, you can file a report with the SCDOR at dor.sc.gov/report-tax-fraud. For information and helpful resources about Income Tax in South Carolina, visit dor.sc.gov/iit.