Tax-related identity theft has been on the rise for years and the ITRC predicts it won’t be slowing down in 2014.
The Javelin Strategy & Research 2014 Identity Fraud Report found incidences of identity theft rose to 13.1 million people in 2013, which is the second highest number in 11 years. And according to the ITRC, tax-related identity theft is one of the main drivers of growth in the overall rate of identity theft. The percentage of tax-related identity theft cases reported to the ITRC’s victim call center more than doubled over the last five years.
It was revealed in the FTC’s Consumer Sentinel Network Data Book that over the past four years, Florida, Georgia, Louisiana, Mississippi and Alabama have consistently reported high rates of government-related identity theft. In 2013, these states reported approximately half of their overall identity theft complaints were linked to this type of crime.
West Virginia’s identity theft complaints soared from 9 percent in 2010 to 44 percent (tied with Alabama) in 2013. According to the ITRC, states with larger populations of elderly individuals, military members and increased levels of organized financial crime typically report higher incidences of tax-related identity theft.
Information used to prepare taxes, such as W-2 forms and receipts, is a treasure trove for identity thieves, making the crime especially prevalent this time of year. As these documents change hands, special care must be taken to protect personal information, whether electronic or paper. By the time tax-related identity theft is discovered, it generally cannot be traced back to the personal information’s exact source of origin, which makes 360 prevention tactics even more important.
The ITRC recommends these tips for preventing tax-related identity theft:
- File your taxes as soon as possible. The longer you wait, the more time an identity thief has to file a return for you
- Protect your computers and mobile devices with firewalls, anti-virus software and complex passwords
- Don’t carry your Social Security card or any other documents with your Social Security number with you
- Order a copy of your free annual credit report from each of the three credit reporting agencies. Stagger these requests throughout the year
- Shred all no-longer needed tax-related documents that contain sensitive information with a Cross-Cut shredder. Documents include receipts, W-2 forms and tax preparer invoices.