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Tax refunds: How to avoid identity theft and hacking?

Scammers waiting to steal tax refunds from the naive have arrived alongside tax season. Financial services firm IPX1031 reports a 45% increase in tax-related identity fraud over the past two years, and the FTC documented 111,723 cases in 2021.

Criminals can use your personal information to file a tax return in your name, in addition to opening credit cards and running up debt in your name. Despite the IRS’s best efforts to prevent fraudulent returns, you are still responsible for protecting your information and identity.

How To Create IP PIN?

Social Security numbers are used as both a username and password for various government services and benefits, and recent major privacy breaches at PayPal and T-Mobile remind us of this fact.

According to Notre Dame technology professor Mike Chapple, who spoke with Forbes, it’s totally reasonable to assume that your Social Security number has been compromised at least once, if not many times.

How do you stop identity theft if your Social Security number is available on the dark web? Tax returns can be protected from identity theft by filing early and obtaining an IP PIN from the Internal Revenue Service.

Individuals can quickly and easily generate their own IP PIN on the IRS website’s Get An Identity Protection PIN page. If you haven’t already, you’ll need to register for an IRS e-file account and verify your identity.

Filing Form 15227, Application for an Identity Protection Personal Identification Number, with the IRS is an alternative to requesting an IP PIN online if your adjusted gross income was less than $73,000 for single filers or $146,000 for married filers filing jointly on your most recent tax return.

You can expect to receive your IP PIN via mail four to six weeks after submitting Form 15227, after which the IRS will call to verify your identity.

Read more: Social Security payments: Can IRS tax your benefits?

How To Retrieve Stolen Tax Refunds?

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Scammers waiting to steal tax refunds from the naive have arrived alongside tax season. Financial services firm IPX1031 reports a 45% increase in tax-related identity fraud over the past two years, and the FTC documented 111,723 cases in 2021.

If you have been a victim of tax-related identity theft, you must act quickly. Use the following steps to report tax fraud:

  1. If the Internal Revenue Service rejects your tax return because it is identical to another tax return filed using your Social Security number, you must file Form 14039, Identity Theft Affidavit.
  2. In response to your affidavit, the IRS may send you a notice that requires immediate action. You can also contact the agency at 800-908-4490 for assistance with identity theft.
  3. Contact your financial institutions to inform them that your identity has been stolen.
  4. To report identity theft, file a complaint with the Federal Trade Commission at identitytheft.gov.
  5. Place a fraud alert on your credit files with the three major credit bureaus:
  • Experian: 800-525-6285
  • Equifax: 800-525-6285
  • TransUnion: 800-680-7289
  1. Consider placing a credit freeze with each of the three major credit bureaus. A credit freeze restricts access to your credit report unless you provide a secure PIN authorization. This aids in preventing identity thieves from obtaining credit in your name.

Read more: What Social Security look like in 2035?

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