6 Tips on how to avoid tax fraud
Tax fraud has become a major problem for taxpayers nationwide. Millions of fraudulent tax returns have been filed in the last few years. This issue is even more prevalent in areas where taxpayers may be more vulnerable. There are some simple steps you can take to protect yourself from becoming a victim of one of these scams:
1) File your taxes early.
Don’t waste any time getting your tax returns to the IRS. When you file early, you reduce the chances of someone else filing a fraudulent return on your behalf. This is because an IRS agent would recognize that two returns were filed under the same name and information. If your return is the first of those two to arrive on an agent’s desk, the second return, which is fraudulent, will be flagged.
2) Avoid sharing your Social Security number and personal information.
If you can avoid it, don’t give out your Social Security number or any other personal information that could serve as a key to your financial records. On any forms that you complete either in-person or online, provide the bare-minimum in terms of the information you give out. If certain information is not required, don’t provide it.
3) Look out for online scammers.
Be aware that scammers often use the Internet to take advantage of vulnerable and naïve individuals. Reports have shown that some scammers have posed as IRS agents and have sent phishing e-mails to people, claiming that their returns need attention. In order to resolve these so-called problems, scammers request the Social Security numbers of individuals. If an e-mail looks just a little suspicious, don’t think twice about responding to it.
4) Keep track of your personal records.
Make sure all of your personal records are organized and safe. It’s best to have both electronic and hard copies of important papers, financial records, and tax information. This is a good way to safeguard against potential computer problems or disasters like fires and floods. Plus, make sure your paper documents are only accessible to you and anyone else you want to have access to them. This will keep them out of the hands of those with bad intentions.
5) Check your credit report annually.
Since scammers often try to hijack credit card information from their targets, it’s important to make sure your credit is good. There are several credit reporting services out there that can provide a quick report of your credit score and situation to ensure you’re in good shape. Any inconsistencies in this information should raise a red flag for you.
6) Avoid using smartphones and tablets for tax-filing purposes.
Although we use smartphones and tablets to accomplish so many tasks these days, it’s best to use a desktop or laptop computer with updated virus protection for tax-filing and recordkeeping purposes. There is no guarantee that your information will be secure when using a smartphone or other device connected to a cell service.
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