Here are some steps you can take to make it less likely that you will be the next victim of tax refund fraud:
- File before the fraudsters do it for you – Your primary defense against becoming the next victim is to file your taxes at the state and federal level as quickly as possible. Remember, it doesn’t matter whether or not the IRS owes you money: Thieves can still try to impersonate you and claim that they do, leaving you to sort out the mess with the IRS later.
- Get on a schedule to request a free copy of your credit report. By law, consumers are entitled to a free copy of their report from each of the major bureaus once a year. Put it on your calendar to request a copy of your file every three to four months, each time from a different credit bureau. Dispute any unauthorized or suspicious activity. This is where credit monitoring services are useful: Part of their service is to help you sort this out with the credit bureaus, so if you’re signed up for credit monitoring make them do the hard work for you.
- File form 14039 and request an IP PIN from the government. This form requires consumers to state they believe they’re likely to be victims of identity fraud. Even if thieves haven’t tried to file your taxes for you yet, virtually all Americans have been touched by incidents that could lead to ID theft — even if we just look at breaches announced in the past year alone.
- Consider placing a “security freeze” on one’s credit files with the major credit bureaus. A security freeze — also known as a “credit freeze,” may be more effective than credit monitoring in blocking ID thieves from assuming your identity to open up new lines of credit. While it’s true that having a security freeze on your credit file won’t stop thieves from committing tax refund fraud in your name, it would stop them from fraudulently obtaining your IP PIN.
- Monitor, then freeze. Take advantage of any free credit monitoring available to you, and then freeze your credit file with the four major bureaus.
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