With new cyber threats emerging daily, identity theft continues to be an issue faced by many individuals. In 2023, the IRS received nearly 300,000 stolen identity reports, with wealthy individuals remaining a prime target. Here’s how you can safeguard yourself and your assets.

What does identity theft involve?

Identity theft encompasses a broad range of fraudulent activities, including but not limited to someone opening a new credit account or taking out a loan in your name, making unauthorized purchases or accessing your existing financial accounts.

Tax related identity theft occurs when someone steals your personal information to file a fraudulent return or to claim a refund or tax credit.

Who are prime targets for identity theft?

Identity thieves typically prey upon individuals with high credit scores and substantial assets. Individuals with high credit scores can obtain loans and new lines of credit easily, making them a key target.

Senior citizens are also targeted as they often have limited technology experience, making them more susceptible to scams.

How do you know if you are a victim of identity theft?

Pay attention to any unauthorized transactions in your bank and credit card statements. Another indication is unexpected denials of credit or unexpected changes in your credit score.

When it comes to tax identity theft, there are some tell-tale signs:

You may be a victim of tax ID theft if:

• You get a letter from the IRS inquiring about a suspicious tax return that you did not file.
• You can’t e-file your tax return because of a duplicate Social Security number.
• You get a tax transcript in the mail that you did not request.
• You get an IRS notice that an online account has been created in your name.
• You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
• You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
• IRS records indicate you received wages or other income from an employer you didn’t work for.

Remember, the IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. DO NOT RESPOND to any purported IRS request originating from these sources.

Key tips to protect against identity theft

The most important protection against ID theft is being vigilant and proactive in monitoring your financial accounts and personal information. Make a habit of regularly reviewing your bank statements, credit card transactions and credit reports. This is the easiest way to spot suspicious activity and mitigate the impact of a breach.

In addition, it is helpful to:

• Keep personal and business accounts separate- This helps limit the exposure of your personal financial information.
• Enable multi-factor authentication whenever possible, whether that’s a fingerprint scan, face ID, or security question.
• Use a password manager to keep track of all your passwords- With access to even one password, an identity thief can penetrate multiple accounts and glean significant information about you.

What to do if you are a victim of tax ID theft:

The Federal Trade Commission recommends that if you’re a victim of tax identity theft:

• Respond immediately to any IRS notice; call the number provided
• Complete IRS form 14039 Identity Theft Affidavit, if your efiled return rejects because of a duplicate filing under your social security number or you are instructed to do so. Use a fillable form at IRS.gov, print, then attach the form to your return and mail according to instructions.

Wondering if your assets are safe? We can help. Reach out to us.