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"If you've had a false tax return filed in your name, the implications of becoming a victim are onerous," said Baird's Director of Financial Planning Tim Steffen, CPA/PFS, CFP(R), CPWA(R).
MILWAUKEE, WI, February 29, 2016 /24-7PressRelease/ -- Tax time is a good time to take a step back and evaluate your finances - to rebalance your portfolio, to take a look at your financial plan and make sure you are saving enough, and if you're older than 50, to increase your contributions to IRAs and retirement accounts. In addition, with tax identify theft on the rise, it's also a good time to take stock of whether you're doing everything you can to protect your personal information from criminals.
According to Baird's Director of Financial Planning Tim Steffen, CPA/PFS, CFP(R) CPWA(R), all taxpayers need to be aware of the risk of tax identity theft and steps they can take to reduce the likelihood of becoming a victim. Here's an example of how it works: A criminal who has your or your spouse's Social Security number files a fraudulent tax return in your name. In 2014, the IRS said they prevented more than $15 billion in fraud. One can assume that they also paid out billions in fraudulent returns.
"If you've had a false tax return filed in your name, the implications of becoming a victim are onerous," Steffen said. Like any case of identity theft, it can take time to resolve the matter and may result in an extended wait for a refund if one is due. In addition to reporting the theft to law enforcement, victims will need to report it to credit reporting bureaus and will be at increased risk for other security breaches such as bank or credit card account fraud.
Steffen recommends taxpayers take the following steps to reduce the risk of tax return fraud:
1. File returns early if you can. "Even if you owe money, it makes sense to file a return before someone else can file one in your name," Steffen said.
2. Protect personal information. Steffen recommends protecting your personal information at all costs. Do not leave personal information on your desk at work or at home, and take care to shred paper records before disposing of them. Do not carry your Social Security card or other documents that include your Social Security number. Use strong passwords for online accounts and vary the passwords you use for different portals. Be alert to Internet fraud and don't click on links in emails if there's any chance it's not from a trustworthy source.
3. Limit sharing personal identification information in person or online. Specifically, don't give out your Social Security number unless it's absolutely necessary.
4. Be skeptical of anyone calling about your tax return. The IRS never makes a first contact with a taxpayer by phone. Suspicious calls should be reported to the IRS.
5. Choose a tax preparer wisely. Tax preparers are increasingly vulnerable, so make sure the one you choose has appropriate data protection measures in place.
"If you do become a victim, it's important to act quickly to notify the IRS and complete the required documentation," Steffen said. Victims of tax identity theft are required to complete IRS Form 14039 Identity Theft Affidavit. They are then assigned an Identify Protection Personal Identification Number (IP PIN) for future tax filing purposes and the IRS commits to monitoring their accounts. For more information, the IRS has published this Taxpayer Guide to Tax Identify Theft.
To schedule an interview with Tim Steffen on this or other wealth management topics, contact Amy Nutter, Baird Public Relations, at (414) 765-3988 or email@example.com. For more tax and financial planning tips and insights, follow Tim Steffen on Twitter @TimSteffenCPA.
Baird is an employee-owned, international wealth management, capital markets, private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has more than 3,200 associates serving the needs of individual, corporate, institutional and municipal clients. Baird has $152 billion in client assets. Committed to being a great place to work, Baird ranked No. 5 on FORTUNE's 100 Best Companies to Work For in 2015 - its 12th consecutive year on the list. Baird's principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird's investment banking and private equity operations. For more information, please visit Baird's Web site at www.rwbaird.com.
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