The Six Simple Secrets for Preventing Tax Identity Theft

How to Prevent Tax Identity Theft

Tax identity theft is a growing concern. And with filing season upon us, you may find yourself a little on edge — for good reason. 

The IRS anticipates losing $21 billion to fraudulently filed tax returns in 2016, up from $5.8 billion just two years prior. Why such steep growth? Because thieves are realizing that this rather lucrative scheme takes relatively little effort to execute.

With just a victim’s name, birth date and Social Security number, identity thieves can file a tax return using an unsuspecting individual’s identity and have that person’s refund deposited into the thief’s bank account.

Victims are often unaware their identity, and their tax return, has been compromised until their own return is rejected by the IRS.

Once rejected, victims can expect to endure mountains of paperwork and lengthy processes to clear their name and get their refund. In 2014, the IRS reported a typical tax identity theft case takes 180 days to resolve.

6 Tips for Thwarting Tax Identity Theft

Some of these tips might make you do a double-take, but they are the most effective methods to ensure a thief doesn’t make off with your tax return this year.

  1. Safeguard your Social Security number
    Let’s start with the basics — your Social Security number is the Holy Grail to identity thieves. Only carry it with you when absolutely necessary; otherwise, store it in a fireproof safe or safety deposit box.

    Be wary when providing your SSN on documents. Ask why the organization needs it, whether it is kept on file and, if so, how it is stored. If the organization were to be hacked/suffer a data breach, your SSN could easily end up in the hands of a tax identity thief.

    In fact, one in five data breach victims suffered identity fraud in 2015.

    Due to the high risk of abuse, it is wise you enroll in an Internet Monitoring service that scans the dark web (a portion of the Internet used to facilitate criminal activities, like selling sensitive data stolen from breaches) for signs of your personal information. If your information is detected, your identity protection provider can alert you to the exposure and work with you to mitigate your risks.
  1. Choose a trusted tax preparer
    All reputable tax preparers should be able to provide you with their IRS Preparer Tax Identification Number (PTIN). A PTIN is issued by the IRS and legally allows an individual to file taxes for compensation.

    While vital, the requirements to obtain a PTIN are shockingly lax. The IRS does not take credentials or education into account when issuing PTINs. That means it’s your job to verify that your tax preparer knows their stuff. Check their professional certifications, education and years in business before deciding.

    Finally, seek reviews and recommendations from friends, family and independent websites. is one of the best places to start. Remember, nothing is more effective at thwarting tax identity theft than old fashioned word-of-mouth.
  1. Encrypt your email
    It may sound a little sci-fi, but it’s actually super easy to do!

    Encryption takes an electronic message and converts it into ciphertext, which cannot be easily understood by anyone except the sender or receiver. So even if a hacker intercepts an email between you and your tax preparer, the message (including attachments) will be complete gibberish.

    If you access your email through an online dashboard, like Gmail, ensure “https” is present at the beginning of the URL. This indicates a secure connection and that your messages will be encrypted. If you only see “http,” type in the missing “s” and press “enter.” Voilà, you’re encrypted!

    For Microsoft Outlook, click on the “Options” tab of a new email, go to “Security” and select “Encrypt Message.” Pretty easy, huh?

    To aid in locking down your online communications, make sure anti-virus software is installed and up-to-date. Likewise, be sure you’re practicing cybersmarts online.

  2. If the IRS calls — hang up!
    Scammers are especially busy around filing season — spending their days contacting unsuspecting individuals, via phone or mail, impersonating the IRS.

    A scammer will claim the victim owes money to the IRS or has an error on their taxes and threatens legal action if the victim does not comply with demands. This typically entails being told to hand over personal information or making a payment over the phone.

    The IRS will never contact you by phone. If you receive a call like this, hang up and inform the Treasury Inspector General. If you’re concerned about the legitimacy of any supposed notice, you may check the validity of these claims by visiting
  1. Never aim for a refund
    This is the big one! Adjust how you view tax time and do away with your refund. Instead of expecting a sum that you’d be miserable if a thief made off with, anticipate owing a small amount. This is done by carefully balancing your quarterly filings based on your tax obligations.

    While this tactic won’t lessen your chances of being victimized — it will certainly lessen the hardship of tax identity theft if it does occur.
  1. File early
    If you are already in store for a refund, the number one thing you can do to avoid having your refund hang in limbo for the next six months is to file before a thief does. If you file first, you will receive your refund and still be alerted if there is a double filing (one from you and one from an identity thief).

    While you’d still have some work to do to resolve the crime, at least you wouldn’t be left without a refund.

Have you ever been the victim of tax identity theft? Share your story in the comments below.

The views and opinions expressed in this article are those of EZShield Inc. alone and do not necessarily reflect the opinions of any other person or entity, including specifically any person or entity affiliated with the distribution or display of this content.

John is General Counsel and Chief Privacy Officer of Sontiq, the parent company of the EZShield and IdentityForce brands. He is a Certified Compliance...
Read more about John Burcham.

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