It's Your Tax Refund, Isn't It?

Here is something that I just learned about and thought I would pass this on to you. Did you know that identity theft has hit the income tax process? Thieves are taking your personal information, filing a false tax return and getting your refund!

How is this possible? You might assume that the thief would have to know everything about you, because tax returns aren't simple documents. There's dependent information, property taxes, employer records, all kinds of information that we all take great pains to make sure is correct. But, these details aren't checked instantly for accuracy. You and I only make sure they're accurate in case we're audited months or even years after we file our returns. The person who steals your tax refund won't be waiting around for an audit. Once he, or she, has your social security number and the tax-id number of any company, (s)he simply makes up the rest of the information. That's right, all that's needed to steal your refund is your social security number and a fake 1099 and/or W-2. The tax return doesn't even need a real return address. If the false tax information is taken to a company that offers instant cash tax refunds, the thief can walk away with the money and simply disappear.

So what do you do about this? Make sure that your information is very difficult to get. I realize that can be challenging. It's ironic, but the more they warn about identity theft, the more we have to produce our proof of identification. How do you keep your information private when you practically have to wear it on your sleeve to get anything done? Here are the standard things that I have told you about previously that you should have already incorporated into your life:

1. Shred all information before throwing it away.

2. Never use easily guessed passwords (your own name, your birthday, etc). Your password should always contain letters, a number and even symbols if they're allowed.

3. Don't save your passwords in your computer.

4. Don't leave your outgoing mail in your home's mailbox, bring it to a mailbox.

Here are a few more tips that I haven't told you about:

1. When you are getting rid your old computer, it is not enough to delete your information, take the time to have someone erase your information professionally. Another alternative is to destroy the hard drive before selling or recycling your old computer.

2. When using a photocopier for your personal information, make sure it doesn't have a memory drive to store copied images. You'll want to make sure that you're walking away with the only copy of your documents.

3. Keep your financial records in a locked file cabinet or a well hidden location. Many of us have housecleaners, repair people, and even acquaintances coming in and out of our homes. We can't watch them every second that they're there. They could be getting your personal information when you aren't watching.

Last year alone, there were over 20,000 complaints with the IRS that the wrong person got their refund. Don't let this be you.


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Jill Russo Foster provides practical tips for everyday finances. Learn more about protecting your credit and living within your means with Jill's popular free report, bi-monthly ezine, and credit report reminder program, available here ==> http://www.themortgagearrangers.com/resources.asp