Make Sure Your Personal Information is Protected from Identity ThievesDecember 19, 2017
Alan T. Huberman, CPA, MST
Jeffrey I. Ziplow, MBA, CISA, CGEIT
Unless you’ve been avoiding the news for the last month, you’re likely aware that Equifax fell victim to one of the largest data breaches in recent memory. Unfortunately, data breaches like this are not uncommon.
According to the Identity Theft Resource Center, an organization that tracks data breaches in order to identify trends over time, the United States is on pace to report close to 1,500 separate breaches by the end of the year. Breaches like these are certainly scary. They can compromise consumers’ personal data, from social security numbers to bank account numbers, and they can create major financial headaches for victims.
It’s vitally important for consumers to ensure they’re taking necessary actions to protect their personal information from would-be thieves. Here are few things you can do now to protect yourself.
Don’t use your debit card
This may sound extreme, and—for many people—it’s simply impossible to avoid. But there are plenty of good reasons to leave your debit card in your wallet and use cash or credit cards instead. Consider the following two scenarios.
If someone steals your debit card information: Your entire bank account will immediately be compromised; you’ll have a short amount of time to catch and report the fraud; and it will likely take several weeks for the stolen cash to be restored in your account.
If someone steals your credit card information: You’ll typically have 30-60 days to catch and report the fraud, and—since the fraudulent charges were taken from a credit account—no cash will ever leave your bank account.
Obviously, neither scenario is ideal. But it’s much easier to recover from a credit card breach.
File Form 14039 with the IRS
If you fall victim to identity theft (or, if you even think you might have had your identity stolen), consider filing Form 14039. Once you file this form—known as the Identify Theft Affadavit—your case will be assigned to the IRS’s Identity Theft Victim Assistance organization, which will conduct a case analysis to ensure all outstanding issues pertaining to the theft were properly addressed.
Certain victims who file Form 14039 will be placed into the IRS’s Identity Protection PIN program and annually will receive a new, six-digit PIN (known as an “IP PIN”) that must be entered on their tax returns. This adds an extra layer of identity protection since the electronic filing of your federal income tax return cannot be accomplished without this PIN. You can find Form 14039 on the IRS website by clicking here.
When possible, redact your personal information
Censor and redact your personal data and information on tax returns, estimated tax vouchers, and other information sent through the mail or online. If your return is compromised during the submission process, this will prevent any significant amount of personal information from being subjected to unauthorized access.
In this age of technology, information can be sent and received almost anywhere, which is both a positive and a negative. The IRS will be able to easily access tax returns with classified information, but so will hackers and thieves, so redacting the information is an important, preventative measure.
Avoid phishing scams
Phishing is an extremely effective way for hackers to obtain sensitive information, simply by disguising a familiar link, which opens an accessible data portal.
Never give out any personal information via email or through an unknown website. To prevent any unauthorized access into personal accounts, use a firewall program to restrict access to confidential information.
And with respect to the IRS, they do not initiate contact or request personal information through e-mail.
Long story short: When in doubt, just delete the email.
Properly file your tax returns
Copies of your tax returns should be saved in PDF format on your personal computer, as opposed to storing hard copies in your home.
Password protected software and other authentication tools installed on your computer will help to prevent any personal data from being compromised. Be sure to change the password periodically, and only sign in to these accounts using safe, secure, and trusted Wi-Fi network connections.
With data breaches becoming more and more common, it’s more important than ever to be vigilant when providing financial or other personal information to third parties. The best way to protect yourself from data breaches and identity thieves is to be aware of the risks, and take the necessary precautions.
Alan T. Huberman, CPA, MST, is a Tax Partner at BlumShapiro. He can be reached at email@example.com. Jeffrey I. Ziplow, MBA, CISA, CGEIT, is a Consulting Partner at BlumShapiro. He can be reached at firstname.lastname@example.org.
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