Your personal and financial information needs protection, and you play a big part in this. Here are five steps to keep in mind to help protect you at tax time and during the year.
First and foremost, e-file your Form 1040. When your tax documents are e-filed, you get direct, immediate acknowledgement from the IRS that your return was accepted and filed. If your return is rejected, as the IRS indicates a return was already filed with your social security number, you know this upfront and can take immediate action.
The action on a rejected return in this instance is to notify the IRS by the completion of an IRS ID Theft Affidavit Form 14039. Other action steps include filing a police report (as identity theft is a crime) and contact with the credit bureaus to protect your credit.
Second, e-file your Form 1040 as early as possible. The sooner you e-file and your return is accepted by the IRS, the better.
Third, if you change your address during the year, be sure that your W-2s, 1099s, and other tax documents follow you to your new location. Don't allow your tax-related documents to end up where you are not.
Also confirm that the address on your Form 1040 is correct and current. The IRS uses your address on Form 1040 in the event they need to contact you.
Fourth, use a trustworthy and secure method to file your returns. If you prepare your own returns, be sure your method is secure. Avoid the use of a public WiFi connection to electronically file your return. Avoid the use of work-related computers or networks to file your return or save your taxpayer information. You have no control over how secure a public WiFi connection or work-related resources are. If you use another person or firm to prepare and file your return, be sure the person is trustworthy. A good source to use to understand how to select a trustworthy tax preparer is the website of your State CPA society.
Fifth, be skeptical of contact from the IRS via the phone, e-mail, text or social media. Especially if the contact requests your social security number or bank-related information. The IRS initiates contact via the U.S. Postal Service (another reason to have a current address on file with the IRS).
If you receive contact from a person that claims to be from the IRS, I recommend my clients to simply say follow up on this matter will be done by my CPA. If you don't have a CPA, bluff, find out what information the caller wants, and find a friendly, local CPA to assist you with this matter.
In the future, when it comes to tax-related identity theft, luck is no longer on your side. Keep in mind the above five steps, and you are well on your way to protecting your taxpayer identity.
Diane M. Spolar is a CPA with Spolar and Associates, Ltd.