Identity Theft – Don’t Let Your Guard Down

Federal quick reference guide to the Tax Cuts and Jobs Act.

Identity theft isn’t a new topic, but it’s a common focus across several industries. Each year, thieves steal the identities of millions of Americans in a number of ways. In this article, we’ll share tips for preventing and responding to identity theft attacks and provide an update on the IRS’s Security Summit efforts.

How Can You Best Protect the Identity of the Deceased?

The identities of deceased taxpayers are especially vulnerable to cybercriminal attacks. Here are a few tips the IRS recommends to help reduce the risk of identity theft after a death:

  • Send the IRS a copy of the death certificate to flag the deceased person’s account and accurately reflect the person has died. The death certificate should be sent to the IRS campus where the income tax return would have been paper-filed. Alternatively, a copy of the death certificate may be attached to the decedent’s final tax return.

  • Send a copy of the death certificate to each credit reporting bureau asking them to put a “deceased alert” on the credit report. This may help alert you to, or even prevent, fraudulent activity on the decedent’s account. While you’re thinking about the bureaus, go ahead and request a credit report to review. Monitor it for suspicious transactions and report any questionable credit card activity you discover.

  • Avoid putting too much information about the deceased in the obituary. Don’t use a birth date, address, mother’s maiden name or any other personally identifying information that could give identity thieves that last piece of key information they need.

You’re a Victim of Identity Theft—Now What?

The IRS has guidelines to help you, or a person authorized by you, obtain a redacted copy of a fraudulent return that was filed and accepted by the agency. Due to federal privacy laws, the victim’s name and Social Security Number (SSN) must be listed as the primary or secondary taxpayer on the fraudulent return; otherwise information can’t be disclosed. For this reason, information isn’t released to those listed as dependents. You’re typically provided with enough information to determine how your personal information was used.

To make the request, complete Form 4506-F, Request for Copy of Fraudulent Tax Return, and mail to: IRS, Fresno, CA 93888-0025. Your request must be accompanied by a copy of your government-issued identification, i.e., a driver’s license or passport. For more information, visit the IRS website.

What’s the IRS Doing to Combat Identity Theft?  

In 2015, the IRS assembled the Security Summit partnership, and in 2017 there was a 40 percent decline in the number of taxpayers reporting identity theft compared to 2016. Since 2015, that number has fallen by almost two-thirds, protecting billions of dollars in taxpayer refunds. The Security Summit is a joint effort by the IRS, state tax agencies and the tax community to help prevent identity theft by developing a more formal, centralized information-sharing process between those responsible for transmitting sensitive taxpayer data. Visit the Security Summit website for additional information and to review the first Security Summit annual report.

How Can You Prepare for the Upcoming Filing Season?

While cybersecurity and identity theft prevention should always be top of mind, filing season creates an enhanced opportunity for identity thieves to strike. The massive flow of sensitive information among taxpayers, their advisors and governmental entities means you should be especially vigilant. Here are a few tips:

  • Always use security software with firewall and anti-virus protections, and make sure it’s always turned on and updates automatically. Don’t forget to encrypt sensitive files that contain tax records, and use strong passwords.

  • Learn to recognize and avoid phishing scams carried out through emails and phone calls from those posing as your bank or credit card company.

  • Don’t risk your SSN being stolen because you carried your Social Security card in your wallet. Store your card in a safe place and avoid taking it out in public.

It seems the IRS has found a way to help guard against identity theft attacks. Unfortunately, cybercriminals are always learning and growing—sometimes at a faster pace than most. At BKD, we strive to stay ahead of the challenge of protecting your sensitive information. This includes finding more secure methods to communicate and transmit data. For more information on protecting yourself against identity theft, contact Katie or your trusted BKD advisor.

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