Combating Identity Theft And Tax Fraud

As tax season rolls around it is extremely important to secure your customer’s personal identifying information in order to protect them from identity theft. Identity theft, especially when it relates to filing your taxes, can be crippling for a person’s finances and land them in a nightmare situation filled with a maze to go through with the IRS. Learning more about how scammers target taxpayers in order to manipulate the system will allow you to take the necessary steps to protect the identity of your customers so that potential fraudsters cannot commit tax fraud.

How Does Tax Fraud Take Place?

Tax fraud is one of the worst forms of identity theft for the victim because it happens during a very chaotic and confusing time for most people. When customers are concerned with tax season they may be more likely to click on links sent to them by supposed “experts.” Fraudsters prey on people by sending emails that claim to need a Social Security number (SSN) and other identifying information in order for them to access their tax profile. They then use the Social Security number to file a forged tax return and draw a refund in the customer’s name. When done early in the year, it can be a long time before victims even realize that their identity has been stolen. The IRS has put together a list that helps customers determine if they are victims of tax fraud.

tax_auditBusiness Tips for Deterring Tax Fraud

It is important to educate your customers about safeguarding their personal information so that they do not become victims of identity theft. Remind them that the IRS will never initiate contact requesting personal or financial information, including PIN numbers, Social Security numbers or bank accounts. They should not reply to these messages, click on any links within emails or open attachments as they could contain computer viruses or phishing programs designed to steal information.

Your organization can do its part to deter tax fraud by using a comprehensive identity verification program. Identity verification will help you verify legitimate customers and secure personal information easily and with the confidence that comes with knowing you are working with the correct individual. As a result, your business will meet industry regulations that require you to do all that you can to validate the identity of your customers. By providing resources to your customers that explains your identity verification program and the steps you are taking to protect their identity and personal information, you will be able to build your existing relationship and draw in new business.

How Can Identity Verification Help?

Identity verification systems do not require customers to disclose more personal information than is necessary to complete the filing process. One of the toughest parts about combatting tax fraud is that fraudsters have access to a customer’s personal identifying information from the start. This is why it is smart to have a system in place that checks information provided against records available to catch any discrepancies before going any further. Identity verification is useful for both in-person and customer-not-present situations.

Deterring identity theft and tax fraud takes customers and businesses working together. Building trust and putting security measures in place will allow things to go smoothly in an otherwise hectic time for your organization and customers alike. Keeping these tips in mind at all times will enable you to fight back against fraud and identity theft at every opportunity.

Written by Britni Zandbergen, Senior Director of Marketing at Idology.  Britni has years of experience in identity management as well as dynamic SaaS solutions.