It’s tax season, and it is a time when many CPAs and businesses share documents electronically. Though technology has made it easier than ever before to transmit information, it also has given rise to sophisticated criminals that steal data for the purposes of identity theft. More than ever, we must be cautious when sending information.
The Identity Theft Tax Refund Scam
One of the most common scams for thieves is using your identifying information, such as your name and social security number, to file a fraudulent tax return and claim a refund. Most criminals that perpetrate this kind of scam file the return early, and receive a check from the IRS before the legitimate taxpayer has even filed.
Unfortunately, electronic filing makes it easier to post bogus wages and income, and thieves are usually able to receive a check within a month of filing the fake return. Though the IRS does double-check wage statements against employer records, they don’t do it until after checks are already issued.
The IRS is Taking Precautions
Fully aware of the problem, the IRS has recently held a security summit with multiple tax software companies, tax preparation chains, and state tax authorities to improve the situation. On the software side, companies have adapted new standards that include:
- Better minimum password requirements
- New security features
- Standard lockout procedures
- More than 20 additional data elements from the tax return
Also, private companies and state tax authorities have promised to share information on a weekly basis for the purposes of identifying and stopping tax fraud schemes.
Work with a Trusted CPA
Top of the line CPAs also work with additional in-house security precautions. For example, PDM uses a secure software system that adds an additional level of encryption and security when sending sensitive emails and documents. To be safe, it is best to work with accountants you can trust.
In addition, good CPAs can help you if you become a victim or think you may have been a victim of identity theft. We have methods of documentation and can recommend next steps to help rectify the problem.
Want Piece of Mind About Identity Theft?
In addition to personally keeping your information safe, it’s always best to have a professional in your corner. PDM’s tax experts can help advise you on the best course of action to protect your information, and always use secure precautions to keep your documents safe. Contact us; with our years of technical experience, advanced training, and cutting edge technology, we are your financial partner.