Tax identity theft: What your business needs to know

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They’re incredibly valuable.  In the wrong hands, they can be dangerous.  And they’re in your workplace right now.  What are they?  Your employees’ Social Security numbers.   Are you taking commonsense steps to thwart tax identity theft at your business?

Tax Identity Theft Awareness Week is January 13-17, 2014.  What’s tax identity theft?  It’s when someone uses another person’s Social Security number to get a tax refund or a job.  It’s the largest category of identity theft reported to the FTC, resulting in billions of dollar in losses each year.  Who’s left in the lurch?  American taxpayers – both individuals and the rest of us, who end up paying the price.

How do fraudsters commit the crime?  In some cases, insiders at a company steal Social Security numbers and other employee information and file phony tax returns, hoping to get a tax refund illegally.  In other instances, perpetrators wait until staff members let their guard down by leaving Social Security numbers readily accessible or casually throwing away sensitive paperwork.

Businesses of all sizes may be vulnerable.  Large companies – for instance, banks or hospitals – are a favorite target.  But it takes only one number lifted from a file to do damage.  So smaller companies are at risk, too.

Of course, employers have legitimate business reasons to maintain employees’ Social Security numbers.  But there are steps you can take to safeguard that information from identity thieves:

  • Store employee files in a locked cabinet or a secure room.
  • Limit access to those with a legitimate reason to use them. 
  • Use secure methods to transport employee data.  Consider encrypted electronic transmission.
  • Properly dispose of confidential paperwork so it can’t be retrieved by light-fingered passersby. 

Looking for more tips?  Read Protecting Personal Information: A Guide for Business and watch the 20-minute tutorial.

There’s something else you can do:  Participate in Tax Identity Awareness Week by educating your employees about how tax identity theft happens, what they can do to help prevent it, and how to respond if thieves strike.  Some other suggestions:

  1. Concerned about starting from scratch?  Not to worry!  Visit the FTC's Tax Identity Awareness Week page for a buffet of free resources – a sample blog post, tweets, buttons, banners, a flyer, a presentation, an article – all ready to use as-is or to adapt for your business.
  2. Put a tax identity theft information table in the lobby of your business.  Print and distribute prevention materials from the FTC and IRS.
  3. Mention Tax Identity Awareness Week in your office newsletter or on your intranet page.  You can cut and paste content from available resources.
  4. Encourage your employees – especially your HR staff or others with access to sensitive data – to participate in a national webinar on January 15th.  (The 1:00 session will be followed by a 3:30 session in Spanish.)  Regional webinars and events on preventing tax identity theft are scheduled throughout the week across the country.
  5. Participate in a Twitter Chat on January 16th.




I actually had this happen to me personally. An employee stole some other employees (including mine) information. I found out when I got a call to verify an auto loan. She put me as a co-signer with her name on it. Not smart and she was busted instantly but this is a real problem. You have people making 8-10 dollars an hour filing this information, its a big risk
I was a victim of tax identity theft in the year 2013.Someone else used my name, SS#, and address and a different employer name & higher income, to try get my income tax refund. Fortunately, the IRS suspected fraud and notified me, but I didn't get my actual refund until February 2014 - after help with an identity theft shield program and several phone calls and additional forms & paperwork were resubmitted. It's a hassle and scary situation to be in.
I have never encountered such a situation, but many of my friends encountered such a situation. So in this case, I am very cautious.

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