There has been a lot of publicity of late around electronic security breaches with a focus on tax software related breaches. The majority of people file their taxes electronically and with tax returns containing your most sensitive personal information it is no surprise that hacking or compromised data that leads to identity theft and other online crimes has become such an important national issue.
Leading tax providers have already issued statements over the last month around security breaches (mainly at the State level) and in some cases have intermittently stopped filings while they address actual or possible software vulnerabilities. TurboTax, H&R block and TaxAct (the big 3 of tax software) with nearly 55 million customers clearly are naturally the biggest targets and TurboTax in particular has been hit hard this year. Already the FBI has been bought in investigate a number of these cases and deal with online criminal groups that are responsible for online tax fraud.
So has my information been compromised and what can I do?
Sadly most people won’t know if their information has been compromised until they file their tax returns and get rejected by the IRS systems, which think that a return has already been filed and a refund issued if applicable. TurboTax owner, Intuit, has said that concerned customers should log on to their accounts and check that their personal and sensitive information is accurate. In particular check your direct-deposit account details are correct because fraudsters change this information to direct any refund monies their way.
Ensure you have the latest anti-virus software installed that prevents online criminals from “phishing” for your information and then being able to log in as you to then change details. If you find you have a virus etc then this could be another red flag. Immediately use anti-virus software to clean your PC or find another computer to log into your tax filing software provided and check your personal information has not been compromised. You can also call identity-protection agents at the major tax software providers, who will provide comprehensive support and filing assistance. Check their websites for the phone numbers.
One of the best protections against identity theft is to change all passwords on a regular basis and make sure they are strong and not easily related to personal information.
The Federal Trade Commission (FTC) advises consumers who have discovered theft of their identities to contact the three major credit-reporting firms — Equifax. Experian and TransUnion — to place initial fraud alerts on their credit files.
The bottom line : File early if possible and if your information is stolen contact your tax provider and the IRS asap. It is a process to work through this, but with the amount of fraud going on all companies take this very seriously.