Thinking about putting off filing your taxes for several more weeks? There’s a compelling reason why you might not want to.
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Cut down on your chances of falling victim to tax fraud
On January 29, the IRS will officially start accepting e-filed returns and traditional paper tax returns.
Sure, you may have filed online a couple of weeks ago. But the tax preparer or tax software you used couldn’t submit your return to the IRS until the final Monday of January.
But even though your return didn’t go through as early as you might have liked, filing as early as you can during tax season is still a great idea.
During the last few years, crooks have been stealing people’s Social Security numbers and filing false returns as though they were those people.
The crooks, who file electronically, typically claim low income and high deductions. When you go to legitimately file your return, it’s rejected by the IRS because somebody else already filed as you!
Now, there’s a new twist on tax return identity theft. The IRS says crooks have been running a successful W-2 email phishing scam operation that has tricked major companies into turning over copies of W-2 forms for all employees.
The m.o. here is a CEO impersonation scam, where a criminal or criminals pretend to be top company brass and asks payroll or human resources for sensitive W-2 data.
The criminals then use that info to file bogus tax returns or sell the breached data online to other criminals, according to the latest IRS warning.
Here’s how to beat the criminals at their own game
If you’re a victim of tax return identity theft, your life becomes a mess. The whole thing typically takes about 10 to 14 months to straighten out when you’re on the receiving end of the scam.
For that reason, I’ve advised callers to make sure they owe the IRS rather than the other way around. In other words, reduce your withholding at work.
That way, you’re not waiting around for money you can’t get your hands on!
Fortunately, the IRS has now trained almost half of their 80,000 employees to spot tax return identity theft and prevent some of it. They’ve had to dedicate somewhere between 3,000 and 4,000 employees specifically to the task of helping victims of identity theft.
The good news is that it’s working! The number of false returns filed in 2016 was 787,000, thanks to increased vigilance on the part of the IRS. That’s down from 1.2 million the prior year.
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