2016 is shaping up to be a busy year for you and your family. Your responsibilities to your children, job and house never seem to lessen. Although autumn is just beginning, you know that Christmas and New Year’s Day will arrive in a blink after Halloween. When those W-2s are delivered, you know that you should track down your deductions, organize your financial accounts and commit to filing as soon as possible. Unfortunately, you usually have the deductions dispersed throughout the house and your financial paperwork is a mess. You have until April to file your taxes, so why sweat the details in January?
While it can be stressful to file your taxes immediately after the winter holiday season, you will be protecting your family’s assets with an early tax submission. If you have been reviewing our website, you know that identity theft can occur when thieves obtain social security numbers and use them to file tax returns early in the season. Another fraud identity thieves employ is to phone homeowners and claim to represent the IRS, threatening legal action if income taxes are not paid immediately.
It may be distressing to consider and upsetting to uncover, but identity fraud does impact those filing tax returns. Should fraud occur, having a plan in place can reduce the impact this crime has on your family and finances. Here are some points to consider:
1. Protective measures you can take to limit the release of personal information
Most people have paper shredders at their homes, using them to destroy not only personal documents but also mailings with their names and home addresses listed. If you do not shred such information, consider doing so. Additionally, secure your personal information, especially your social security number, at in a safe place at home. Checking credit reports annually is a helpful habit to adopt because credit reports can indicate whether additional lines of credit have taken in your name.
2. The signs that could indicate taxes have been filed in your name
Even if you are proactive in protecting your personal information, data breaches do occur. If your personal information is taken and fraudulent accounts have been created in your name, there is evidence that a crime has taken place. The IRS has noted that victims will be notified that there have been multiple tax returns filed for one year. Your tax attorney may uncover records revealing a higher income than you were paid at your job. If you receive notification from the IRS describing such discrepancies, it is imperative for you to act.
3. Steps to take upon discovery of tax fraud
When you realize that you have been the victim of identity theft, you should contact the IRS, local police, credit bureaus and companies that hold your accounts. While there are many agencies that will act to protect your personal information, they may not have access to the same information. It is a process, but contacting each agency will ensure that that the impact of the fraud can be limited.
Each agency will require certain forms be submitted to document the crime and hasten its resolution. If you feel overwhelmed during this stressful period, you may want to seek advice from a knowledgeable tax attorney who has experience navigating this process.