5 Ways Personal Information Might be Stolen for Tax ID Theft

December 11, 2015 | By: Miranda Marquit

five ways scammers steal tax refundsOne of the growing issues facing many taxpayers is that of tax refund fraud. There is a chance that someone will take your personal information and claim a refund in your name — before you can submit your own tax return.

While one of the big ways for fraudsters to get your personal information is through phishing attempts and other shady techniques that involve trying to trick you, there are other ways that your information might be stolen for tax ID theft. Here are some of the ways your personal information might be harvested by tax scammers:

Dishonest Tax Prepare

Before you let someone else prepare your taxes, do what you can to check their credentials. There are shady tax preparers that might encourage you to fudge the numbers, or who straight out take your information and sell it to fraudsters — or even use the information themselves. I use an accountant to prepare my taxes, but he’s been vetted pretty thoroughly, with me checking up on his credentials.

Medical Records

When you receive health care, your personal information is often collected. If someone at the hospital or doctor’s office decides to go through your records and take your information and sell it to fraudsters, your tax refund could be at risk. When filling out intake forms at a health care service provider, try to avoid giving your Social Security out. The blank is there on the form, but I usually ignore it. For the most part, there isn’t a real reason for health care providers to have that information, and the fewer places your Social Security number is on record, the better.

Credit Application

One of the downsides to applying for credit, whether it’s a student loan or a credit card, is that you do need to provide your Social Security number. There’s no getting around it. That means there’s the potential that someone working at the company will steal the information and sell it to a fraudster, or even use the information themselves. We often don’t think about what happens when we submit such an application, but the reality is that there is the chance that someone will take the information and use it for their own benefit.

Mailbox Raid

When you put something into your mailbox, it’s insecure until the postal carrier comes and takes it (even then, someone could rob the mail truck). If you’ve filled out a credit application or submitted some other paperwork containing your personal information, it could be stolen and used to fill out a fraudulent tax return. If you have something sensitive to mail, consider taking it to the post office to reduce the chance of theft. It’s also the reason you should shred important documents before you throw them out. Someone raiding your trash could get a lot of information from you.

Data Breach

Finally, your information might be stolen in a data breach. Your information is stored on computers all over the world, and a hacker might get access and sell the information to the highest bidder.

The best you can do is remain vigilant, file your taxes as early as possible, and know what to do in the event that someone else claims tax credits in your name