2014

AARP Issues Warning: Watch out, New York Among Tops in Nation for Tax Season Fraud

Empire State Ranks #5 in Tax-related ID Theft; AARP Releasing Quick Tips to Get Your Refund w/out Losing Your Shirt

NEW YORK, Feb. 6, 2014 /PRNewswire-USNewswire/ -- Across New York, tax filing documents from employers, banks, financial firms and many others are hitting mailboxes – and so are ID thieves, warns AARP. According to the FTC, New York ranks in the top five states for tax-related ID theft, meaning whether New Yorkers are expecting a refund or dreading writing the check to the IRS, many fraudsters have literally got their number.

The problem has been worsening across the nation over the last few years:

  • 2010: 15.6% of all ID theft complaints were rooted in taxes or wages.
  • 2011: 24.1% of all ID theft complaints pertained to taxes or wages.
  • 2012: that number skyrocketed to 43.4%

In New York State, tax-related theft is the number one type of ID theft reported.

Today, AARP New York is releasing some quick tips and information to help New Yorkers get their refunds without losing their shirts:

What is tax identity theft?
Someone uses a taxpayer's personal information to commit fraud on tax returns to claim refunds or for other crimes, including:

  • Filing a fraudulent tax return using another person's Social Security number.
  • Claiming someone else's children as dependents.
  • Claiming a tax refund using a deceased taxpayer's information.
  • Earning wages under another person's Social Security number.

How does it work?
Crooks look for discarded tax returns, bank records, credit card receipts, Medicare cards and more, often relying on email or telephone phishing, dumpster diving, or stealing from your mailbox. They use that information to file for a tax refund before you do. When you file your return later, IRS records will show the first filing and refund, and you'll get a notice or letter from the IRS.

AARP warns to watch out for:

Mail thieves: Late January through mid-February provides the ideal opportunity for mail-stealing crooks to retrieve documents such as W-2 and 1099 forms detailing personal information — including your Social Security number — so they can open fraudulent credit accounts in your name.

IRS impersonators: Tax Man tricksters typically begin a campaign of phony phone calls and bogus emails as tax-filing season arrives. Beware of people claiming to need your personal information (such as your Social Security number), reporting a "problem" with past returns, or promising "new" or "updated" tax forms sent by email. Click to download these "forms" and you may well be downloading malware.

Refund rip-offs: This scam is often conducted by street gangs who attend classes held by identity thieves. They don't need W-2s or other supporting documents, just basics like your name, SSN and birthdate — and a computer. Your refund may end up direct-deposited into a bank account temporarily used by the scammer under the false identity, mailed out as a treasury check (often to a vacant home) or preloaded on a debit card, with which the money can be withdrawn from an ATM.

Costly bad advice: Have you been promised "free" government money or "secret" tax breaks if you'll file new paperwork with the IRS? Don't believe it. These and other conning claims are the calling cards of unscrupulous tax preparers who seek easy money at your expense — assuming they're not outright scammers intent on stealing information from your tax forms to commit identity theft or sell that data to other fraudsters on the black market. Some operate from temporary storefronts or recruit clients by holding "seminars" advertised on church or public bulletin boards. Before trusting any new tax preparer or website, do your homework.

What can you to do protect yourself? 

File as early in the season as possible, and mail tax returns directly from the post office.  If filing electronically, use a secure network and encrypt.

Stay safe online.  Do not respond to emails that appear to be from the IRS, and never click on links! The IRS does not send unsolicited, tax-account related emails and never asks for personal and financial information.

Protect your personal information.   Never store important account numbers or data in purses or wallets, or on smartphones.  Use a shredder for paper documents, and install a locking mailbox.

Pay attention. Watch out for which expected tax documents have arrived and when; if they're not received by mid-February, call the sender to ask why.

Make sure it's legit. Legitimate tax correspondence will arrive by U.S. mail in a sealed envelope. So beware of trash mailings like one that appears to suggest an impending tax audit -— but actually is bait to sell "audit protection services" for up to $50 per month.

Protect that return. If you mail your tax return, put it in a secure mailbox or hand it to a mail carrier. Don't leave it for pick-up in your home mailbox.

Do your homework:  Before trusting any new tax preparer or website, get referrals from friends and family.  You can ensure that e-file providers are IRS-authorized by clicking on the link.

Monitor your accounts and review financial statements regularly. Sign up for your free annual credit report at www.annualcreditreport.com.

Think you're a victim of tax ID theft?

Take these steps right away:

  • File a report with the local police.
  • Contact your bank and credit card companies.  Inform credit bureaus and consider freezing your accounts (a credit freeze restricts access to credit reports, making it unlikely that thieves can open new accounts in your name).
  • Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490 and complete Form 14039.
  • Get an IP (Identity Protection) PIN from the IRS so they can verify your identity as they work with you on the theft going forward.

Follow us on Twitter:  @AARPNY and Facebook: AARP New York

AARP is a nonprofit, nonpartisan organization, with a membership of more than 37 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as healthcare, employment and income security, retirement planning, affordable utilities and protection from financial abuse. We advocate for individuals in the marketplace by selecting products and services of high quality and value to carry the AARP name as well as help our members obtain discounts on a wide range of products, travel, and services.  A trusted source for lifestyle tips, news and educational information, AARP produces AARP The Magazine, the world's largest circulation magazine; AARP Bulletin; www.aarp.org; AARP TV & Radio; AARP Books; and AARP en Español, a Spanish-language website addressing the interests and needs of Hispanics. AARP does not endorse candidates for public office or make contributions to political campaigns or candidates. AARP Foundation is an affiliated charity of AARP that is working to win back opportunity for struggling Americans 50+ by being a force for change on the most serious issues they face today: housing, hunger, income and isolation. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at www.aarp.org.

SOURCE AARP New York



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