If you have been following our blog, you know that there are several reasons for filing your taxes early in the tax season: to ensure the security of your tax return and to promote peace of mind. Unfortunately, no matter how early you file or how many sensitive documents you shred for disposal, there are possibilities for data theft regardless of personal fastidiousness.
Due to their heavy reliance on cloud-based databases, computer servers and the internet, institutions have several points of access that data thieves can exploit should they identify a weakness in security. Anyone who has shopped at Target or Home Depot, carried health insurance through Anthem or filed taxes with the IRS within the past few years is familiar with the warnings these institutions provided after their databases were illegally accessed. When their servers were compromised by identity thieves, these companies revealed personal information: social security numbers, personal addresses or credit card information.
Regardless of the security protocols set in place, computer hackers find ways to access an “impenetrable” security system. Given the variety of those institutions impacted, it’s not possible to resolve to purchase items using only cash as a means to protect yourself from a data breach; if you file taxes and carry healthcare, it is possible your personal information could become compromised again in the future.
In the occasion that this event does happen, the IRS has published guidelines for tax payers to follow should they believe they have been impacted by a data breach.
1. Find out which type of personal information was stolen during the data theft. When a cyber attack occurred at JP Morgan Chase in 2014, the names, addresses and phone numbers of account holders were taken. Social security numbers and account passwords were not. When you determine which type of information has been compromised, you can take the appropriate steps to safeguard your data.
2. Determine what the impacted company is doing to support victims. Check the company’s website to see if free credit-monitoring services are being offered.
3. Contact Experian, TransUnion or Equifax to obtain a free credit report. The Federal Trade Commission also suggests placing a credit freeze on your accounts to ensure that there is no unauthorized access to your records.
4. In the case that information pertaining to your tax filings has been taken, review our blog to see which steps to take upon discovering tax fraud.
While you don’t have control over how large corporations or institutions secure your personal information, you can determine how well you respond when your information is illegally released. Have a plan and know your options should this problem arise.