Tax Time Survival: Protect Your Small Business From Tax Refund Fraud
For this installment of our Tax Time Survival series brought to you by PowerSites, we’re going to give you tips on protecting yourself and your small business from tax refund fraud.
Don’t put off filing your taxes for too long. According to an annual report, recently released by the FTC’s Sentinel Network, about 160,000 tax identity theft complaints were reported to the FTC in 2012, says Forbes.com‘s staff writer, Janet Novak. The most common way a person can commit identity theft-related tax fraud is by stealing a taxpayer’s social security number and filing under his name. If someone else gets your refund before you file, that will hold up your ability to file and receive a refund.
While it might seem as if you are powerless to the ill effects of this awful crime, Sheryl Harris of the Plain Dealer online journal on Cleveland.com says that there are several steps that you can take to protect yourself and your family from becoming a victim of identity theft.
Protect Your Identity
You do have a choice and you can protect your family and your finances from being used in a fraudulent manner. There are identity protection solutions out there that you can try out to experience their effectiveness. You can sign up for a 30-day free trial of the Life Lock protection service and see what it’s like to have a company check on your credit, bank records and other financial aspects of your life that need to be kept safe.
Phishing for Refunds
Novak says that many taxpayers have been receiving fake emails that say they are from the IRS, and that recipients should not respond to these emails, but report them to the IRS immediately. How can you know for sure that an email is not from the IRS? Novak says that the IRS only contacts filers by regular mail. Harris also says that if a social media site contacts you and says that they need information from you, regarding an audit or return, that is definitely a phishy situation that indicates an attempt at committing fraud.
Create Impenetrable Passwords
If you’re filing for a refund online, Use a strong password to secure all of your sensitive data and be careful about who you share it with. Be sure that the password is a combination of upper and lowercase letters, numbers, symbols and characters. Keep a safe record of your passwords in an easy to access app, like Lock ‘Em password manager.
If you keep spreadsheets or QuickBooks records, clear all of the tax data from your hard drive after you file and save the data onto an external hard drive or thumb drive. Harris says that after you are finished with filing, make sure that you keep the external drive in a protected place.
If you have any concerns or would like to know ahead of time if someone has already filed under your name, contact the IRS and give them your social security number and any other information they need to verify that you are who you say you are. Remember, if you are the one who is calling, you don’t have to worry about giving your sensitive information. It’s when someone calls you and asks for your sensitive data, that you should hang up.
Tax Time Survival: Finding the Right CPA for Your Small Business
February 20, 2020