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Protect yourself: The important facts about identity theft

We generally dedicate our monthly article to covering financial topics that could, or already do effect business for farmers and agribusiness professionals. From tax issues to succession planning — we’ve covered everything you might expect from an accounting firm. But now, with tax season upon us, we want to shine a light on something more personal-tax identity theft. Read on for sound advice and vital tips on how to protect yourself from becoming a target, and what to do in the event that your identity is compromised.

Cases of tax identity theft continue to rise. The Federal Trade Commission (FTC) estimates as many as nine million Americans have their identities stolen each year. Now, more than ever, the IRS is focused on preventing, detecting and resolving tax identity theft cases, but the threat is still very real for taxpayers.

How will I know if I am a victim?

According to the Internal Revenue Service’s online guide to identity theft, the following raise red flags and most likely signal your identity has been tampered with:

  • Multiple tax returns being filed on your behalf.
  • IRS records show you received wages from an unknown employer.

It is confirmed, my identity has been compromised… where do I turn?

Turn to your accountant. If you don’t have one, reach out to a firm to immediately begin to assist you. An accounting firm will work with the IRS and other necessary parties right along with you.

The first step will be to respond directly to the IRS by calling the number on the notice they have provided to you. This notice will arrive via U.S Mail. The IRS will not initiate communication with you through any other outlet, including telephone, email, texting or social media. Anyone reaching out to you through these channels is not credible and is most likely conducting a scam.

Responding to the notice you received from the IRS in the mail will begin the rectification process. Early on, you should expect to be asked to complete an IRS Identity Theft Affidavit (Form 14039).

The steps to protecting your identity from being compromised further don’t stop with the IRS. You will also want to immediately do the following:

  • File a report with the local law enforcement.
  • Contact all three major credit bureaus (Equifax, Experian and TransUnion) and ask to speak with their fraud department.
  • Close all accounts that could be targeted and check to see if any fraudulent accounts have been opened in your name.
  • Check with the Social Security Administration to insure that your earnings statement hasn’t been tampered with.
  • Continue to file your tax returns, even if you must do so by paper. Work with Holbrook & Manter on this filing to insure that all elements are in order.

Could this have been prevented?

Cases of tax identity theft are complex and can take several months to resolve. Taking steps to prevent this from happening is your best defense so you aren’t left waiting for refund dollars. Here are some tips on how to protect yourself:

  • Don’t carry your social security card or documents where it appears. Only give this information out when absolutely necessary.
  • Check your credit report periodically. At least check it annually.
  • Secure all personal financial information and keep these documents in a safe place, perhaps even locked up in a safe.
  • Electronically, use firewalls and anti-spam virus software on all computers you use for financial matters such as paying bills.  Also, change Internet security passwords frequently to better safeguard information.
  • Don’t give personal information over the phone, through the mail or online unless you have either initiated the contact or are sure the party asking is trustworthy.

More information about taxpayer identity theft can be found on the IRS website www.irs.gov

Find an accounting firm that understands how unnerving a situation like this can be that is committed to protecting you and your assets. Should you have any questions or you run into problems regarding protecting your identity, please reach out to us. We would be happy to help.

 

Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through the firm website.

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