Taxes are inevitable. As the saying goes, taxes are literally one of the two guarantees we can always count on in life. Unfortunately, what we can also count on are ill-willed identity thieves eagerly awaiting the opportunity to take advantage of all the sensitive data passed around during tax season. Identity thieves love tax season for a variety of reasons – here are just a few:

• Sensitive documents will be exchanged, sent, and shared between employers, employees, and tax preparers.
• They know large amounts of money will be moving across accounts, especially online.
• Scams are easy to pull off during this busy time – people are quick to react to mail (or e-mail) from the IRS because they want to get their returns. This gives fraudsters the opportunity to act maliciously.

Tax filing is already a complicated process and security is just another risk filers have to consider, not the least of which is choosing the right tax preparer. The good news is there are several important steps consumers can take to help keep their data safe.

Here are some tips to keep in mind as you safely file your taxes this season:

Top Tips for a Safe & Secure Tax Season:

1. Be suspicious of any calls or emails purporting to be from the IRS, no matter what the issue. For example, some scams claim that someone else has already filed tax returns in your name or with your SSN. The IRS will always write to you first, will rarely call, and will never email you.

2. Never confirm your SSN or bank account details by email or over the phone unless you are the one placing the call.

3. If you plan to use an online tax preparation service, make sure you stick with a reputable one that has adequate security measures in place. And be careful when typing in the URL or web address of an online service in case you misspell the name and end up on a fraudulent site that looks like the real one.

4. If you plan to use online tax preparation software and intend to keep a copy of your return on your computer, you should immediately rename your return with a different file extension. It is also highly recommended you use a USB external drive to save your information instead of storing it directly on your computer.

5. Make sure your computer is free of malware like computer viruses and spyware that can steal a copy of your SSN or bank account password.

6. Choose your tax preparer carefully and don’t be afraid to ask them important security questions, such as how your information is protected at their offices during and after preparation, how long they will keep a copy of your tax return, and whether they conduct background checks on their employees.

7. If you owe money to the IRS, try to pay online through their system. If you have to pay by check, spell out the name “Internal Revenue Service” because it’s harder to forge than the letters IRS.

8. If you make copies of your return on a photocopying machine, be aware that many machines keep a copy of your pages in short term memory! Using photocopiers in public locations is not recommended.

9. Don’t forget to shred any unnecessary documents or copies when tax season is over. Dumpster divers will be on the prowl to get your banking account details and SSNs.

10. Use a credit and public monitoring service. Services like IDENTITY GUARD® TOTAL PROTECTION(SM) provide the most comprehensive identity and credit protection solution; including, three credit scores, credit monitoring, credit report updates, ID monitoring with alerts, SSN and address monitoring, and more.

Join the discussion! Learn about the latest tips to protect your identity during tax season, and join our Twitter Party with Resourceful Mommy on Thursday, March 8th from 8:00 to 9:00 p.m. ET.

Intersections’ Consume Security Adviser Neal O’Farrell reports on an inventive identity theft scam that was recently uncovered in Florida.

It was addictive. Just like the dope they once sold on the streets, if not more, according to the story in the Seminole Heights newspaper. “The scheme is extremely simple but extremely lucrative,” said the U.S. Secret Service Special Agent in Charge.

They were talking about Operation Rainmaker, an identity theft scheme that was so easy and so lucrative it persuaded drug dealers to abandon their age-old trade and turn instead to identity theft instead. The operation got its name from law enforcement simply because of the vast amounts of money thieves were able to rain down on themselves – about $130 million in fact.

Authorities were only tipped off to the scheme when tax payers began to file complaints that when they went to file their own taxes, they found someone else had filed using their name. And that was the core of the scam.

Here’s what they discovered. The thieves were using public sites like Ancestry.com to assemble the identities of the living and the dead, and were also buying complete identities on the black market – something that’s surprisingly easy for anyone to do.

Once the thieves had assembled enough information about an individual, they used off-the-shelf tax return software like Turbo Tax to file fraudulent tax returns. And that was probably the easiest part of the entire scam. The IRS is unable to thoroughly review or cross-reference every single tax return they receive, or spot any red flags like a sudden change of a taxpayer’s address. And if the amount of the return is under $10,000, it rarely gets scrutinized.

So naturally the thieves kept their returns under the $10,000 threshold and then sat back and watched the IRS rain money down on them. That money came in credit cards or checks issued by the Treasury and sent to a variety of homes, some of them vacant, or deposited electronically into bogus accounts.

Once they had their hands on the funds, the thieves would go on spending sprees. The scheme was so lucrative and widespread, authorities in the area said they noticed a significant reduction in street-level drug dealing. According to the story, informants told police that local drug dealers quickly realized that identity theft was a much more lucrative and safe line of business.

As soon as authorities got wind of the scheme, they assembled a task force that included police and Sheriff’s departments, the United States Secret Service, the United States Postal Inspection Service, State Attorney’s Office, and the United States Attorney’s Office.

But in spite of all the evidence they had gathered, authorities had trouble in filing charges of tax fraud because the IRS refused to share the records they had – apparently the IRS protects the personal information of thieves who are caught committing tax fraud.

Nearly fifty people have been arrested so far, and here’s exactly how law enforcement laid out the multiple steps in this bizarre criminal enterprise:

• Create Fake Identity

• Suspects search the web to find identities of deceased or living victims.

• Defendants buy large volume of identities from suspects who are stealing names and social security numbers from businesses, medical facilities or prisons.

• File Fraudulent Tax Return Online

• Suspects use multiple electronic filing programs including, Turbo Tax, Tax Hawk and Tax Slayer. Turbo Tax is the most commonly used.

• Suspects refer to this tax scam as “doing drops.”

• Request Refund on Green Dot Card, Treasury Check or Direct Deposit

• Suspects have refunds sent to vacant homes, another suspect’s home or an innocent bystander’s home and then intercept the mail.

• Defendants open fraudulent bank accounts to receive direct deposits.

• Cashing in the Refund

• Suspects withdraw money from ATM’s.

• Buy large ticket items or money orders at legitimate businesses.

• Suspects launder the money through illegal businesses.

And apart from how easy it was to pull of the scam – if they’d stuck to victimizing dead people they might never have been caught – the most worrying part of the story is how drug dealers and other criminals are turning away from traditional crimes and to identity theft. And with so few investigations, arrests and prosecutions for identity theft, what have these crooks to worry about?

Want to learn more about identity theft protection and our credit monitoring services?

Keep informed about the latest threats to your safety. Join our Facebook group.