INDUSTRY INSIGHTS PROTECTING YOUR EMPLOYEES FROM TAX- RELATED IDENTITY THEFT
INDUSTRY INSIGHTS PROTECTING YOUR EMPLOYEES FROM TAX- RELATED IDENTITY THEFT
by LESLIE UDY
Tax-related identity theft is a growing concern in the United States. It occurs when someone uses a stolen Social Security Number( SSN) to file a fraudulent tax return and claim a refund. This type of fraud can cause significant stress and financial disruption for your employees.
The Scope of the Problem
• The Internal Revenue Service Criminal Investigation unit uncovered over $ 9.1 billion in tax fraud and financial crimes in 2024.
• Identity theft now occurs every 4.9 seconds in the U. S., with over 6.4 million total fraud and identity theft reports filed in 2024 alone.
The Internal Revenue Service Criminal Investigation unit uncovered over $ 9.1 billion in tax fraud and financial crimes in 2024.
• The median loss per fraud case is around $ 497, and total losses from fraud and identity theft exceeded $ 12.7 billion in 2024.
Warning Signs of Tax-Related Identity Theft
• Cannot e-file tax return because one has already been filed using their SSN.
• Receive IRS notice about multiple returns, additional taxes owed, or wages from unknown employers.
• Notice suspicious activity on credit report or receive government benefits or unexpected IRS correspondence.
Prevention Tips for Employees
• Protect your SSN: Only share it when legally required.
• Use strong passwords and enable multifactor authentication.
• Don’ t click on anything. Links are not safe and often take you to fake sites that appear to be legitimate. Go to the site directly to access your account and any information.
• Shred personal or sensitive documents before discarding them.
• File taxes early to reduce the chance of fraudulent filing.
• Monitor credit reports regularly for unfamiliar activity.
Be Wary of Ghost Preparers
Phantom tax professionals are another prevalent scam. They will contact you out of the blue. They might tell you they can assist you in receiving a bigger refund or getting a tax credit for which you don’ t legitimately qualify.
Red flags include:
• The preparer refuses to sign your tax return.( Major Alert that it’ s a scam!)
• A tax professional will never offer to prepare your tax return based on a paystub rather than official documents.
• They insist on payment in cash( especially if you’ re not getting a large refund).
• They promise unrealistic refunds or tax breaks.
A GOLDEN RULE: When in doubt, take your time. Scammers will often pressure, threaten, or demand a way to get your information quickly. Always take time to research, verify, and ensure that you’ re not being targeted. Don’ t hesitate to reach out to trusted contacts and professionals who can help you.
- Chip Capelli, a professional accountant and certified by Intuit as a Platinum Level ProAdvisor for QuickBooks.
26 EQUIPMENT DEALER MAGAZINE • U. S. EDITION