Privacy Tips for Tax Filing Season

The Internal Revenue Service (IRS) began accepting 2016 income tax returns on January 23, 2017.  More than 153 million individual tax returns are expected to be filed in 2017.

In this post, we’ll provide privacy tips that are relevant to taxpayers during tax filing season.  We’ll begin by reminding you to watch your postal mailbox for tax information returns such as IRS Form W-2 (from your employer) or IRS Form 1099 (reporting interest, dividends, pensions, unemployment benefits, state tax refunds, and real estate transactions).  These information returns contain a wealth of sensitive personal information and will include either your full or truncated (partial) Social Security Number (SSN).  Consider the following tips as you wait for these forms to arrive:

  • If you have moved during the year, be sure to provide your new address to any organization that might be mailing you a tax information return. This includes your employer (including past employers), your state’s unemployment office (if you have received unemployment benefits), your bank or credit union, and your stock broker.
  • If you are not using a locked mailbox or P.O. Box, a missing form could be a warning that you are at risk of identity theft.  A fraudster may have stolen your mail and could use your SSN to steal your identity.

Once you are ready to begin, there are several methods for completing your tax return.  Taxpayers may prepare their tax returns themselves, either manually or by using an online tax preparation service.  They may also choose to download tax preparation software.  Finally, they may enlist the services of a tax preparation company or an individual tax preparer, such as an accountant.  Depending upon the method that you use to complete your return, consider the following privacy tips:

  • If you use a professional tax service, check out its privacy policy and security practices first. If the company maintains a website that collects personally identifiable information from California consumers, the law requires the company to post a conspicuous privacy policy on its website stating what information is collected and with whom it is shared, and to comply with such policy.
  • If you use a walk-in tax preparation service, examine the facility carefully to see how well your privacy and personal information will be protected. Can other people overhear your conversations? Are computer monitors visible to prying eyes? How will your documents be secured? Are discarded documents properly shredded?
  • If you are using your computer to prepare your return, make sure that your computer is secure.  Update your spyware and anti-virus definitions.  Then, check your computer for viruses and spyware.  Be sure that you have a firewall installed.  Our consumer guide Securing Your Computer to Maintain Your Privacy can help you make sure that your computer is safe.  Never use a public computer or Wi-Fi hotspot for tax filing.

After you have completed your tax return, you have a choice of filing by postal mail or electronically. You have a number of options for filing your tax return electronically.  If you file by postal mail, you may want to mail your return certified mail, return receipt requested.

If you are expecting a tax refund, it’s a good idea to file your return as soon as possible to avoid tax-related identity theft.  This occurs when someone uses your SSN to file a tax return in your name and claims a fraudulent refund.  You may be unaware that this has happened until you file your return and discover that a return already has been filed using your SSN.  If this happens, your tax refund could be delayed by six months or longer while the IRS investigates. If you have ever been the victim of a data breach involving your SSN, you are at higher risk for this type of identity theft. 

  • Tip: If you filed your tax return last year as a Florida, Georgia or D.C. resident, you are eligible for the IRS’s Identity Protection PIN (IP PIN) program.  These three locations have the highest per-capita percentage of tax-related identity theft. The IP PIN is a 6-digit number to confirm your identity when you file your return. It helps prevent identity thieves from obtaining a fraudulent refund using your SSN and avoid delays issuing any refund you may be due.

After you have filed your tax return, what should you do with your old records that are no longer needed for tax filing?

  • Be sure to shred any documents containing personal information, especially your SSN.  Home shredders can be purchased in many stores.  Some office supply stores and banks offer shredding services.
  • Always use a crosscut or confetti shredder. Strip cut shredders should be avoided, as the strips can easily be pieced together (think of it as a very simple jigsaw puzzle).
  • Our Personal Data Retention and Destruction Plan consumer guide can help you decide what you need to save and what you can shred.

Finally, watch out for IRS imposters.  Scammers know that many Americans have a fear of owing money to the IRS and they often use this to their advantage. IRS imposters may call or email to threaten you with arrest or other legal action in hopes that you will send money or give out sensitive information. Alternatively, a scammer may tell you that you are entitled to a large refund if you provide sensitive information over the phone.  Be aware of the following:

  • The IRS always corresponds with taxpayers via postal mail.  The IRS does not call or email to ask for money.  Nor will the IRS ask for a specific form of payment such as a wire transfer or a prepaid card.
  • It is easy for scammers to spoof their phone number or make an email appear to be from the IRS (or anyone else).  This means you shouldn’t trust a caller or email even if it appears to be from the IRS.  If you are still concerned that the call or email may be real, you should call the IRS directly at (800) 829-1040. 

Questions?

  • If you have any questions or complaints about your privacy, please use the orange or blue buttons at the top of the page to let us know.
  • If you believe you are the victim of identity theft and need assistance, contact the Identity Theft Resource Center.