[IMGCAP(1)] As the debate goes on about how to curb the increasing incidence of taxpayer identity theft in the U.S., members of BKR International discussed their experiences during the recent tax filing season, as well as ways to mitigate future risk and help clients respond to fraudulent activity should it occur.
Concern over Higher Risks
Confirming reports nationally, BKR members cited physicians as high-risk targets for fraudulent tax returns. To complicate matters even more, some physicians who had received an E-File pin number from the IRS in prior years for increased security had these same pin numbers rejected by the IRS for the current year, necessitating a paper filing of their return by mail.
BKR members also confirmed an increase in rejected e-filed returns due to compromised social security numbers, as well as incidents of credit card and bank account fraud among their clients.
Taxpayer and Certified Public Accounting Firm Strategies Against Fraud Activity
To mitigate the risk of fraud on tax returns or any other personal and financial client data, BKR members are urging their clients to follow IRS guidelines on fraud mitigation, reporting of suspicious activity and responding quickly to actual identity theft:
Protect Sensitive Data:
- Don’t carry your Social Security card or any other document with your SSN on it.
- Don’t routinely give a business or retailer your SSN just because they ask be certain it’s absolutely necessary.
- Protect personal financial information at home and on your computer.
- Request a credit report every four months for free by alternating among the three different credit agencies.
- Check Social Security Administration earnings statements annually.
- Protect personal computers with firewalls and anti-spam/virus software; update security patches and change passwords for Internet accounts.
- Don’t give personal information over the phone, through the mail or the Internet unless you have either initiated the contact or are sure you know who is asking.
Notice Suspicious Activity:
The IRS will only send notices through the U.S. Postal Service, never through email or by phone, fax or social media. Report suspicious online or emailed phishing scams to: firstname.lastname@example.org. For phishing scams by phone, fax or mail, call: 1-800-366-4484. Report IRS impersonation scams to the Treasury Inspector General for Tax Administration’s IRS Impersonation Scams Reporting.
Respond to Red Flags:
- More than one tax return was filed using your SSN
- You owe additional tax, refund offset or have had collection actions taken against you for a tax year you did not file a tax return
- IRS records indicate you received wages from an employer unknown to you
Report Identity Theft:
- File a report with law enforcement.
- Report identity theft at ftc.gov/complaint and learn how to respond to it at identitytheft.gov.
- Contact one of the three major credit bureaus to place a fraud alert’ on your credit records:
Equifax, www.Equifax.com, 1-800-525-6285
Experian, www.Experian.com, 1-888-397-3742
TransUnion, www.TransUnion.com, 1-800-680-7289
- Contact your financial institutions and close any accounts opened without your permission or accounts that show signs of tampering.
- Check your Social Security Administration earnings statement annually. You can create an account online at www.ssa.gov.
If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, take these additional steps:
- Respond immediately to any IRS notice; call the number provided.
- Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form at IRS.gov, print, then mail or fax according to instructions.
- Continue to pay your taxes and file your tax return, even if you must do so by paper.
- If you previously contacted the IRS and did not have a resolution, contact the Identity Protection Specialized Unit at 1-800-908-4490. They have teams available to assist.
Review Security Options with Your CPA:
BKR member firms cited the following strategies to support the protection of client data:
“All communication we send out is required to be encrypted under federal and state government guidelines. That said, we offer clients the same one button’ ability to encrypt all information sent to us.” — David Goldner, CPA, CFP, CVA, managing partner of Gross Mendelsohn & Associates, P.A., in Baltimore.
“We offer a secure web portal to protect our clients’ submission of tax information to our staff.” — Richard Giordano, CPA/Shareholder of Fischer Cunnane & Associates Ltd., in Philadelphia.
“We as CPAs are in a unique position to help our clients understand how identity theft is committed and how they should best respond to the incident if it occurs. BKR members regularly share information on successful strategies and protocols to protect our clients at all times of the year, not just during filing season.” —Howard Rosen, CPA, JD, AEP, President and Principal of Conner Ash P.C. in St. Louis and BKR International Worldwide Chairman.
Go Even Further to Protect Personal Information:
According to the Identity Theft Council, identity theft happens somewhere in the U.S. every three seconds. They offer a free guide for mitigating security risks to personal and financial information. https://www.identitytheftcouncil.org/images/downloads/ThinkSecurityFirstHandbook2015.pdf
They have also produced a documentary that looks into the minds of identity thieves and real victim examples to shed light on this expanding criminal industry. http://thieves.identitytheftcouncil.org/
BKR International is one of the top 5 global accounting associations, representing the combined strength and market exclusivity of more than 160 independent accounting and business advisory firms in over 500 offices and 80 countries. To learn more, visit www.bkr.com