What You Need to Know About Data Breaches and Tax Identity Theft

While everyone loves the convenience that technology provides, but there are many risks when companies store our personal information online or on the cloud. Almost every day, scammers are stealing Social Security numbers, credit card numbers, and other sensitive personal data. At S.H. Block Tax Services, we’re painfully aware that tax identity theft still poses a huge threat.

In this article, we discuss the troubling increase we’re seeing in data breaches and what you can do to protect your tax refund and privacy.

What Is Tax Identity Theft?

Tax identity theft occurs when someone fraudulently uses your Social Security number and other personal information to file a tax return on your behalf. They may invent phony jobs, wages, and claims, and then request a large refund. If the scammer submits their fraudulent return before you file, they will quickly disappear with their fraudulent refund. (Many tax identity theft victims discover the fraud when the IRS rejects their legitimate return and tells them that they’ve already filed.)

While the government has tried to crack down on tax identity theft, it remains among the IRS’s “Dirty Dozen,” a list of the most common scams we face.

RELATED: IRS Knocking at Your Door? How to Tell if They’re the Real Deal?

What Can We Learn From 2019’s Major Data Breaches?

2019 was one of the worst years on record for data breaches. According to Risk Based Security, a data security company, breaches were up by 33% in 2019, affecting roughly 7.9 billion personal records. Some of the most high-profile breaches include:

• Capital One: exposed 106 million credit card applicants’ and customers’ personal information, including 140,000 Social Security numbers and 80,000 bank account numbers
• Ascension: more than 24 million banking and mortgage documents were unprotected for two weeks
• Quest Diagnostics: 12 million patients’ financial and personal data were stolen
• Oregon Department of Human Services: nine employees clicked on a phishing link and comprised about 2 million emails

You may have been a data breach victim and aren’t aware of it yet. You should always check your email and mail because companies should let you know when your information has been compromised.

If you know that you were a victim of a data breach, you should take action and protect yourself.

RELATED: Identity Theft, Tax Fraud, and Protecting Your Anonymity

How Data Breach Victims Can Protect Themselves

There are many ways you can be proactive and safeguard yourself against tax identity theft.

Double-Check Your Network and Account Security

When using your computer, make sure you have a firewall and security software installed, as well as a strong password for your Wi-Fi. If you’re in a public place, it’s best not to log onto unprotected Wi-Fi on your mobile device or computer. With logins for websites, make sure you set up strong passwords that are unique to every site, and that you use multi-factor authentication if it’s an option.

Keep an Eye Out for Phishing Attacks

You should never open up emails from unfamiliar senders. If you do, don’t click any links inside, because those links could lead to phishing sites that steal your information. Don’t open up attachments or send money to people you don’t know, either. If a pop-up ad shows up when you’re browsing, don’t download any software or apps it’s promoting.

Don’t Fall for Tax Phone Scams

If you ever receive a phone call from someone claiming it’s the IRS, hang up and block the number immediately. The IRS typically will not call you. Instead, they will send you mail on its official letterhead. If you’re unsure whether a phone call or written notice is legitimate, contact a tax professional for assistance.

Monitor Your Credit Score and Accounts

If you’re impacted by a data breach, it’s a good idea to keep an eye on your credit score, bank accounts, and Social Security records. If you see unexpected changes, contact the authorities and your tax lawyer immediately.

File Your Tax Return Early

While you shouldn’t rush your tax preparation, the IRS encourages early filing for good reason. If you beat tax scammers to the punch, you have more control over your refund and may significantly reduce your risk of harmful identity theft.

S.H. Block Tax Services: Connect With Our Tax Professionals

If you fell victim to a data breach this year, or you think your tax identity has been compromised, reach out to the team at S.H. Block Tax Services. They will be happy to look into what it’ll take to recover your identity, ensure your information doesn’t get stolen again and get you on track for filing your taxes in 2020. Get in touch today.

References

Gressin, S. (2019, July 30). The Capital One data breach: Time to check your credit report. Federal Trade Commission. Retrieved from https://www.consumer.ftc.gov/blog/2019/07/capital-one-data-breach-time-check-your-credit-report?utm_source=govdelivery

Risk Based Security (2019, November). Data Breach QuickView Report: 2019 Q3 Trends. Author: Richmond, VA. Retrieved from https://pages.riskbasedsecurity.com/hubfs/Reports/2019/Data%20Breach%20QuickView%20Report%202019%20Q3%20Trends.pdf

Turner, S. (2019, December). 2019 data breaches | The biggest breaches of the year. IdentityForce. Retrieved from https://www.identityforce.com/blog/2019-data-breaches

The content provided here is for informational purposes only and should not be construed as legal advice on any subject.