It’s tax time again. Income tax identity theft is a major problem. According to the IRS, “Tax-refund fraud is expected to soar again this tax season, and hit a whopping $21 billion.“ Thousands of people have lost millions of dollars and their personal information to tax scams and fake IRS communication.
The most common way income tax fraud occurs is when a thief files an income tax return using a victim’s Social Security number, along with a counterfeit W-2, indicating that a large refund is due.
It is important to note that the IRS doesn’t initiate contact with taxpayers by phone, email, text messages or social media channels requesting personal or financial information. The IRS also does not threaten taxpayers with lawsuits, imprisonment or other enforcement action.
The simplest way to reduce the risk of income tax fraud is by filing your income tax return as early as possible. If you file early, your tax refund will most likely be processed before the IRS receives the fraudulent return.
Below is an audio file of an interview I had last year on my BlogTalkRadio program with Steve Weisman, a lawyer, writer, college professor, and one of the country’s leading experts in scams and identity theft. In the interview, we discuss how to reduce the risk of tax fraud and the steps you can take to minimize identity theft. I encourage you to take a few minutes to listen to the broadcast.