Protect Yourself Against Tax Fraud This Year

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Protect Yourself Against Tax Fraud This Year

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Tax fraud is getting worse and worse, and the IRS says it is powerless to stop it.

My journey to becoming a Financial Concierge and Certified Money Coach started when I learned how to balance a checkbook at my parents’ clothing store. But there is another side to my profession, and that is helping people.

Twenty years ago, our greatest challenge during Tax Time was to gather reams of paper together and somehow get them postmarked before April 15th. Today, in an age where we have cell phones more powerful than the computers that took us to the moon, the new challenge is not becoming a victim of tax fraud. In my book How To Be Smart, Successful, And Organized With Your Money, the longest chapter is devoted to fraud, and especially tax fraud:  

  • In 2016, tax return fraud is estimated to be $21 billion.
  • In 2011, that figure was $5.2 billion
  • Each tax identity theft case takes roughly 180 days to resolve.

Things like protecting your Social Security number, cross-cut shredding anything with identifiable information, and never giving information over the phone can do a lot to safeguard against tax fraud, but as I mention in my book, sometimes that is not enough:

A small-yet-well-known seasonal tax-preparation firm has recently been accused of modifying the bank routing number on returns and diverting electronic refunds to its own account. Worse yet, some fly-by-night tax preparers have been caught manipulating the data on their clients’ tax returns in order to claim more dependents to increase the amount of the refund they are stealing.

This is why I always recommended asking friends for referrals when searching for a tax professional—and if that doesn’t work, do the research to find someone who has a stake in your community:

In other words, don’t go with somebody who hangs out their shingle and does tax returns only during tax season. Go with a reputable CPA firm that is open all year round.

To find out about more methods to protect yourself against tax fraud—or any kind of fraud—check out my book on Amazon or contact me!

How To Be Smart, Successful, And Organized With Your Money By Judith Heft


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