To be sure, the incidence of tax-related identity theft has decreased in recent years, largely due to the hard work of the Internal Revenue Service and its Security Summit partners. However, identity theft is still serious enough to be included on this year’s “Dirty Dozen” list of scams from the IRS.

The list is compiled every year and spotlights the 12 most common scams taxpayers and tax professionals could face at any time of the year – not just tax season. Many schemes may peak during tax season, but for the scammers, it’s a full-time gig.

Tax-related identity theft occurs when someone uses a stolen Social Security number or Individual Taxpayer Identification Number (ITIN) to file a fraudulent tax return claiming a refund.

“Taxpayers should continue to protect their sensitive tax and financial data to help protect against identity thieves,” IRS Commissioner Chuck Rettig said. “The IRS and the Security Summit partners in the states and the private sector have joined forces to improve our defenses against tax-related identity theft, sharply reducing the number of victims. But we encourage taxpayers to continue to be on the lookout for identity theft schemes, including email phishing attempts and other tax scams.”

Attacks from Many Directions

Taxpayers should remember identity thieves constantly strive to find a scheme that works. Once their ruse begins to fail as taxpayers become aware of their ploys, they change tactics. Taxpayers and tax professionals must remain vigilant to the various scams and schemes used for data thefts.

Business filers should be aware that cybercriminals also file fraudulent Forms 1120, U.S. Corporate Income Tax Return, using stolen business identities and they, too, should be alert.

To avoid becoming a target of tax-related identity theft, follow the basic instructions from the IRS and its Security Summit partners. These precautions apply to taxpayers and tax pros alike:

• Always use security software with firewall and antivirus protections. Make sure security software is turned on and can automatically update. Encrypt sensitive files such as tax records stored on the computer. Use strong passwords.
• Learn to recognize and avoid phishing emails and threatening phone calls and texts from thieves posing as legitimate organizations such as banks, credit card companies and government organizations, including the IRS. Do not click on links or download attachments from unknown or suspicious emails. Invest in good anti-spyware and anti-malware software protection.
• Protect personal data. Don’t routinely carry a Social Security card, and make sure tax records are secure. Treat personal information like cash; don’t leave it lying around

Protecting Your Bottom Line Since 2015

The IRS began working with state taxing agencies and the private-sector tax industry in 2015. Dubbed the Security Summit, the group enacted a series of safeguards that made inroads against identity thieves and protected taxpayers. Their measures are still in use today and continue to be refined and improved.

The measures include expanded information-sharing among the tax industry partners and state and federal tax agencies in addition to stronger IRS controls to screen for and guard against fraudulent income tax returns.

 The Security Summit has worked to increase awareness among taxpayers and tax professionals about tax-related identity theft and security steps through its “Taxes. Security. Together.” and “Protect Your Clients; Protect Yourself” campaigns.

The effort, however, is more than just making taxpayers and tax practitioners aware of the dangers of identity theft. The partners serving on the Security Summit panel are actively working to come up with state-of-the-art data analysis tools that can help keep the IRS one step ahead of the scammers.

For more information on tax-related identity theft, check out the Identity Theft pages on IRS.gov; business partnerships, estates and trusts can consult their Identity Theft Guide; and businesses can also find useful information in Publication 4557, Safeguarding Taxpayer Data: A Guide for Your Business.