Steps You Can Take To Protect Yourself & Your Business

Author: Keith Huggett

Identity theft occurs when someone takes personal information, like a name, or Social Security number, or other information, without your permission, to commit fraud or other illegal activity.  Government document identity theft is the most common form of identity theft.  Normally, a person's Social Security number is stolen and used to file a tax return to claim a fraudulent refund.  When the legitimate taxpayer files his or her return, the IRS rejects it.  The taxpayer is then forced to correct the situation and repair his identity, which in most cases takes an enormous amount of time and effort by the taxpayer.

As a business owner, identity theft is a bit different.  While the tax return may still be fraudulently filed, other issues may remain hidden until the business receives a notices from a government agency regarding unpaid employment taxes, erroneously claimed tax credit, unreported merchant payment card income and more.

Steps for Individuals

• File Tax Returns Early - Identity thieves generally file early in the season. The earlier taxpayers file, the less likely an identity thief can assume their identity and file first.
• Protect Social Security Numbers - Don't carry your social security card outside of your house in a purse or wallet that could be lost or stolen. You should not give out your SSN unless absolutely necessary. If required, challenge the requirement.
• Internet Passwords - You should use a complex password and change it frequently.  Using your child's name, favorite pet, date of birth, or anniversary is asking for trouble.
• Install Firewalls and Anti-virus Protections - Utilizing anti-virus software can protect your computer from mal-ware and viruses used to damage your computer and steal your personal information.
• USPS Service - Don't trust your mailbox! Make that extra stop at the post office to drop off your mail.  If you are going on vacation, have the postal service hold your mail.
• Shredding Documents - Your trash can is not a safe place to throw away documents...unless you shred them first.  An identity thief is not above searching through your trash. It's a gold mine of information. Shred everything!
• Check your Credit Score - Be sure to check your credit.

Steps for Businesses

• Account Monitoring - Monitor accounts on a daily basis. Enroll in e-mail alerts to be immediately notified of any change in account name, address, or other information.
• Safeguard a Dissolved Business - Businesses that have closed are particularly susceptible to business identity theft.  Businesses that fail to undergo the formal dissolution progress, terminating all of the corporate authority, make it easy for identity thieves to easily reinstate charters and then use that former business's entity to conduct tax fraud and other schemes.
• Bank Protection - Review your banks' policies and recommendations regarding fraud protection.
• Safeguarding Documents & Identification Information - Protect your EIN by giving them out only when required.
• Password Protection - Change your passwords frequently and use complex passwords.

While all of this may seem like common sense, identity theft happens every single day.  Identity theft has grown by more than 542% from 2011 through 2013. It is estimated that 1 in 14 people across the United States fell victim to Identity Theft in 2012 above the age of 16, affecting approximately 16.6 million people.  2/3 of those people experienced some kind of financial loss.  Over $24.7 billion dollars was lost to identity thieves in 2012 alone.

Assistance with repairing your identity is available if you have become a victim of identity theft.  If you believe you are at risk of identity theft due to lost or stolen personal information, you should immediately contact the IRS so the agency can take action to secure your tax account. If you have received a notice from the IRS, call the phone number on the notice. You may also call the IRS’s Identity Protection Specialized Unit at 800-908-4490800-908-4490 FREE.

The specialists at the Tax Office Inc., are available to answer any questions you may have on the tax ramifications of identity theft.  Contact us if you think you may have been a victim of either business or individual taxpayer identity theft. We may have just the information you need.