Ready or not, Tax Day is quickly approaching. With the advancements in the online tax
preparation technology and software, many people who wouldnt dare attempt to
file their own tax returns even just 5 years ago, can easily do so in the
comforts of their own living room. For
the average person, gone are the days of making an appointment with a tax
advisor and spending a Saturday afternoon filing taxes. With the online tax preparation, someone can
file their taxes at their own leisure and the software walks you through
exactly what to do, and even tells you if it thinks you’ve made a mistakenot only
do you now have the convenience, but you also have the confidence in knowing
your taxes (at least should be) are filed mistake free. However, there are inherent
risks that come along with this convenience.
Tax returns are the crme de la crme for identity
thieves.Not only do online tax forms contain your
personal and financial information, they also contain your spouses information
and your dependents information.Dont
get me wrong, online tax preparation is greatit makes filing a breeze and
makes reviewing previous years tax returns nothing more than a few clicks of
the mouse. However, you typically only
have a username (most likely an email address) and probably an 8-12 character alpha-numeric
password protecting documents which my grandparents use to put in a lockbox at
their bank.
Earlier this month, USA
Today published an article that states in 2012 there were just shy of
450,000 victims whose stolen SSNs were used by thieves to collect unwarranted
refunds; that number rose more than 80% over 2011.In a similar story, just yesterday
(Wednesday, Feb 27, 2013) authorities arrested six people in Los Angeles, CA
that used nearly 2,000 stolen identities to file nearly 3,000 false tax returns and they obtained more
than $19 million in unwarranted tax refunds.
Until the time in which the online tax preparation companies
start utilizing such products as EVS IdentiFraud
Consumer + KBA
to verify and authenticate the individual attempting to log-in is indeed who
they claim to be, we, as consumers, must do our own due-diligence to ensure our
information is protected when filing taxes online. Check out this article and
inforgraphic from Mashable that mentions some ways to keep yourself safe and reduce
the risk of becoming the next victim of identity
theft.
[Contributed by Eric Knapp, VP of Client Services]
