Millennials are bringing innovative ideas to management
July 16, 201710 Common Accounting Mistakes Business Owners Make
July 16, 2017
- Tax season is officially here. And filing your tax return early is a great idea, especially if you’re getting a refund. But here’s another important reason you might want to file as early as possible: refund fraud.
- Refund fraud is a type of identity theft that happens when a criminal uses your Social Security number and other personal information to file a fraudulent tax return. Any refund they claim is sent directly to their address.
- Don’t think it can happen to you? Think again: In recent years, the Internal Revenue Service has paid out billions of dollars in refunds later discovered to be fraudulent. The IRS is working to make it more difficult for criminals to participate in refund fraud. But it’s still expected to be a major problem this year.
- If you’ve ever been a victim of identity theft, you know it can take months—even years—to fully sort out the crime. The same is true for refund fraud. You must wait while the IRS investigates your situation and for your real return to be filed and your real refund paid.
- At the same time, refund fraud only works if criminals file a return with your personal information before you do. If they file afterward, their request automatically will be denied. That means the more quickly you file your return, the less of a chance you have of becoming a refund-fraud victim.
- Right now, you might be waiting on all the paperwork you’ll need to file your tax return. If that’s the case, just prepare as much as you can. When those final required pieces of documentation arrive, you will be ready. Experts recommend filing early even in cases where taxpayers owe money to the IRS. Filing early doesn’t mean you have to pay the IRS early; if needed, you can wait until the April 18 deadline.
- Don’t forget some practical tips for reducing refund fraud. First, make sure to limit sharing of your personal information. Second, be skeptical of any contact you have by phone or email with someone claiming to represent the IRS. That’s because the IRS usually doesn’t initiate contact by phone or email. Call the IRS by phone for verification at 1-800-829-1040.
- The IRS also provides additional tips on how to prevent identity theft and refund fraud, as well as information on what to do if you feel you are a victim of refund fraud.
