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Protecting your identity at tax time

There are a number of ways that online security can be compromised, but preparing your tax return shouldn’t have to be one of them. Learn how some basic measures can help protect you from identity theft and tax scams while still filing your return on time.

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When you file your tax return, you need to provide a significant amount of personal information like your name, social security number, address and work information. These are details you do not want to fall into the wrong hands.

But unfortunately, identity theft and other types of tax scams are becoming increasingly more common.

Each year it’s estimated that there are over one hundred thousand fraudulent tax returns filed claiming billions of dollars in refunds.

But there are several ways that you can safeguard yourself from identity theft or other scams, while still filing your tax return efficiently and on time. This video will highlight some of the most common tax scams and steps you can take to avoid them.

Phishing is one of the most prevalent types of identity theft. This is when someone contacts you, pretending to be someone else, and asks you for personal information like a password or social security number.

One example would be if you get a call or email requesting that you change or reset your password for an e-filing website. Or, a caller may try to intimidate you pretending to be an IRS agent and demanding that you owe money, or possibly threatening legal action if you don’t turn over certain information right away.

Other times, they may entice you with promises of a huge refund. Either way, it’s a scam. The IRS will not get in touch with you by phone or ask you to disclose this type of information over the phone or in an email. If you do owe money, the IRS will send you a bill in the mail, which you have the right to question before paying.

If you’re not sure if you might owe money, you can always contact the IRS directly by phone.

A lot of folks use some sort of professional service to help them prepare and file their tax return each year. Most of these services are legitimate. Some are not. Here are some red flags that you may want to look out for:

First: be suspicious of any tax preparer who promises you a huge refund before they take one look at your tax information.

And if they ask you to sign a blank tax return or sign before the return is completed, walk away.

And just like you’d think twice if a prince from a far off nation asked you to put money in some bank account, a reputable preparer will never ask you to deposit any portion of your refund into his or her bank account either.

The IRS has a directory of verified tax preparers…

that may help you find a verified tax preparer in your area. 

Every January, employers start sending out Form W-2’s…

Thieves know this and may try to intercept these mailings.

Or, they may try to steal documents that you may be sending to a tax preparer.

All of which have important personal information on them.

It may be difficult to know if it’s happened to you because you might not realize your information was stolen until it’s too late. So, if you don’t receive your Form W-2s by early February, check in with your employer. And if you find your information has been stolen, contact the IRS as soon as possible. They will likely assign you a pin number to use going forward.

In addition, if you need to send sensitive tax information through the mail, consider certified mail or a mail service that allows you to track your package. This may cost more money, but it may help protect you against identity theft.

Now, if your Social Security Number has been compromised through a data hack or some other breach, a thief could use this info to file a fake tax return in your name and steal your refund.

You can prevent this by doing things like installing anti-virus and anti-malware software and frequently updating system software on your personal devices, never emailing or texting your social security number and not otherwise sharing it with anyone, unless you absolutely have to.

Making sure your passwords are hard to crack can also help and checking your credit reports and other financial statements from time to time to look for anything suspicious.

Unfortunately, sometimes a data breach is beyond your control. But filing your tax returns as early as possible might still protect you from a potential theft, since it gives potential thieves less time to file a phony return in your name.

If you do find yourself a victim of fraud, it’s a good idea to report it right away by calling the FTC—that is, the Federal Trade Commission—or you can report it online at These resources can help you figure out your next steps.

It’s also worth noting that some thieves create fake charitable organizations in order to solicit donations during tax time. Before you give any organization money, it’s a good idea to verify its legitimacy. The IRS has a database where you can check to see if an organization is eligible to receive tax-deductible contributions.

And finally, while they might sound glamorous, you probably want to be wary of offshore accounts. True, no one loves the idea of paying a lot in taxes, but be suspicious of any plan promising to help you avoid paying taxes, particularly through these types of accounts. Not only may these be fraudulent, they may also be illegal.

While it’s true year-round, it’s particularly important during tax season to protect your personal information. Tax fraud crimes are on the rise, so if something suspicious does happen, the IRS has a form on its site to report any potentially fraudulent activity.

By taking these simple precautions:

…you can help protect yourself from fraud and help make sure your refund stays yours.

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The material provided on this Website is for informational use only and is not intended for financial or investment advice. Bank of America and/or its partners assume no liability for any loss or damage resulting from one's reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment management. Any U.S. federal tax information included in this communication was not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal tax penalties. Neither Bank of America nor any of its affiliates provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

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