This year taxpayers have two extra days — until April 17 — to file their 2017 taxes. If you’re like the 20 to 25 percent of Americans who wait until the last two weeks to prepare their returns, you may have an extra reason to start a little earlier next year.
According to the Internal Revenue Service, filing early could prevent tax-related identity theft, one of the most common tax scams.
In this scam, a criminal uses a stolen Social Security number to file a fraudulent tax return. If a scammer uses your number, you may be in for a rude awakening when you click to e-file and discover someone else has gotten there first. The IRS allows one refund per Social Security number every year.
What do you do if this situation happens to you? For starters, you still need to file your tax return. Complete IRS Form 14039, Identity Theft Affidavit, attach it to your return and file by mail.
If you’ve had your identity compromised (in a data breach, for example) and let the IRS know, you could be eligible for an identity protection personal identification number (IP PIN).
The IRS will assign a new number to you every year and require its use on your tax returns, making it more difficult for fraudsters to file using your Social Security number.
Tax-related identity theft is just one of many scams that tend to surface during tax time.
Even if you’ve already filed your return, beware of the following scams that aim to trick you into giving up money or sensitive information.
Criminals have long used a simple phone call to scam unsuspecting victims. The Treasury Inspector General for Tax Administration estimates that more than 10,000 individuals have paid $54 million to phone scammers since October 2013.
In a common tax scam making the rounds, scammers call victims and impersonate an IRS agent demanding payment for unpaid taxes.
They may threaten arrest or legal action unless the victim pays immediately with a wire transfer, a prepaid debit card or credit card number.
Conversely, some scams entice victims with the promise of a large refund.
They may ask for a Social Security number to verify identity or bank account information to deposit the refund.
Don’t be fooled, even if a caller seems official. Scammers can alter their caller ID numbers, use fake badge numbers or even use your name and address to sound legitimate.
The IRS will almost never contact taxpayers by phone and will never demand immediate payment or ask for financial account information over the phone.
These online schemes can be difficult to spot, especially for individuals unfamiliar with technology.
Scammers may email their victims claiming to be from a trusted bank or credit union, a credit card company, tax software provider or the IRS.
Their email may contain a link that directs you to a login portal or website that appears legitimate. This is the “bait” that lures victims into entering their username and password without a second thought.
If you’re redirected to a suspicious site, don’t try to sign in or input any personal information. Look out for typos and grammatical errors, language that doesn’t seem right, or a fishy website address.
Secure addresses will start with “https:” followed by the trusted institution’s name. If your URL starts with anything else, close the site immediately.
Don’t be misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov.
Scammers are getting more creative with their methods. Guard your personal information in order to keep your identity and finances secure.
Visit HawaiiStateFCU.com/events to register for free seminars on topics ranging from identity theft to fraud protection.
Jennifer Russo is the financial educator at Hawaii State Federal Credit Union, providing learning opportunities and community outreach to strengthen financial literacy in Hawaii.