The dramatic increase in unemployment identity theft fraud during 2020 serves as a wake-up call for the potential for fraud in the 2021 tax season. With the frequency of data breaches and common use of Social Security Numbers for identification, experts at the Identity Theft Resource Center believe thieves already have the information they need to file a phony tax return in your name.
IRS data suggests 80% of Americans file their tax returns online, which presents its own set of risks with the limited cybersecurity options provided by the IRS. This, paired with the reduced security of SSN identification, means individuals should take action to protect themselves from having a false return filed in their name.
One simple, but extremely effective, tax fraud deterrent is to file your tax return as early as possible. By filing ahead of the deadline, you can potentially ensure the IRS receives your genuine return ahead of any false ones.
Opt-in to the IRS Identity Protection PIN program
Previously, the IRS Identity Protection (IP) PIN was only offered to individuals who had previously had their identities stolen. Now, anticipating a wave of tax fraud in the 2021 tax season, the IRS has made the Identity Protection PIN feature available to everyone.
It is highly recommended that individuals go through the verification process to attain an IP PIN. This extra layer of security provided by the IRS may prove instrumental in deterring criminals attempting to file in your name.
With SDC CPAs’ decades of experience investigating fraud cases and following identity theft scams, founder Dee Studler recommends a special degree of caution this tax season.