You don’t have to look far to see the latest security breach a public or private organization has experienced. In many instances, tens of thousands or even millions of businesses and individuals have had their data compromised. With that in mind, the IRS, states and the private-sector tax industry have come together to increase public awareness about the importance of protecting personal financial information in a new campaign called, “Taxes. Security. Together.”
In addressing the security issue, IRS Commissioner John Koskinen said, “In short, the criminals are evolving, and so must we.”
In order to understand why tax data is such a rich target for criminals, it is important to look at the sheer number of businesses and individuals who file taxes, and the amount of money involved in the process. According to Koskinen, there are 150 million households that file federal and state tax returns involving trillions of dollars, and more than 90 percent of them are prepared electronically on laptops, desktops or even smartphones.
The Government Accountability Office has reported from 2011 to 2014, the IRS stopped 19 million suspicious tax returns from potentially paying $63 billion in fraudulent refunds. But the agency still paid out $5.8 billion in refunds that were later found out to be fraudulent.
The tax identity theft also extends to businesses, especially small businesses. If you run your own business, take the same precautions to protect your personal, financial and business data. And that is what this campaign looks to do, increase the awareness level so everyone can protect themselves.
During the 2016 filing season, the IRS, the states, and the tax industry are implementing tougher security measures that will involve individuals taking a proactive role in protecting their personal and financial data. The agency will have new standards for logging on to all tax software products, including minimum password requirements, new security questions and standard lockout features.
The campaign will continue until the April tax deadline. It will include YouTube videos, weekly tax tips and local events across the country. Users can access the information on IRS.gov, state Web sites and from the tax community.
The collaboration between all parties will also extend to sharing information so new schemes can be identified quickly and information about them disseminated before they cause serious damage.
So what can you do to protect yourself? First, it doesn’t take a lot of resources and expertise to take the actions needed to protect your data.
The IRS recommends the following steps:
- Check your credit report, bank and credit card statements often. This is the best ways to find out if someone has stolen and used your identity.
- Keep your computer secure with firewalls and anti-spam/virus/malware software that updates automatically.
- Encrypt sensitive information and don’t leave your personal data out in the open.
- Only send your personal data on websites with “https” addresses.
- Use strong passwords and change them regularly.
- Back up your files on an external encrypted storage system and keep it in a safe place.
The agency also asks individuals to take additional precautions when they are online.
- Don’t open emails unless you know for sure where they come from; this also includes opening attachments in emails.
- Don’t download music, videos or applications from sites you are not familiar with.
- Don’t put too much identifying information on your social media account.
- Always shred hardcopies before you throw them in the trash.
- Another tactic criminals use is to impersonate IRS agents. If anyone contacts you claiming to be with the IRS and you don’t know who they are, hang up and call the agency directly.
The commissioner concluded by saying, “It’s clear that when it comes to identity theft, we all have a part to play. With the public’s help, this will greatly strengthen and improve the new tools being put in place by the IRS, states and industry. This will help us continue to make progress against this threat.”
If you suspect tax fraud activity, please visit this IRS page.
Tax Photo via Shutterstock