Unfortunately, identity theft comes in many different shapes and sizes. Let’s review the tax-related types of id theft that could impact your clients.
IRS identity theft
IRS identity theft is when thieves fraudulently file a tax return using someone else’s information early on in the season before the real taxpayer has had a chance to file. Then, when you attempt to file the unsuspecting taxpayer’s return, their refund is already long gone in the hands of the identity thief.
Once an instance of IRS Identity theft has been reported, the IRS issues the taxpayer a special PIN number. This PIN must be used when filing future tax returns in order to help prevent further theft.
Other forms of identity theft
Other instances of identity theft occur when identity thieves obtain someone’s Social Security number. This can be used to sign up for credit cards, effectively ruining the victim’s credit and stealing his or her money. Social Security numbers can also be used to pay medical or utility bills in the victim’s name. The repercussions can be widespread and can go unnoticed for long enough to do some serious damage.
Recovering from this kind of identity theft involve police reports, credit bureau reports, credit monitoring, replacement of cards and licenses, and many other time consuming and expensive tasks.
To prevent identity theft incidents, advise your clients to guard their information carefully and monitor their credit regularly. It is also wise to invest in a program like Protection Plus to help your clients recover as efficiently and cheaply as possible if their identity is stolen.
To learn more about the benefits of Protection Plus for your clients, visit www.myprotectionplus.com or call (866) 942-8348. TaxAct Professional customers can learn more about Protection Plus Audit Assistance here.