Keep impersonators at bay! Along with its boon, the digital era brings with it some trouble as well, and identity
theft is one problem that is growing in frequency. In the ever-increasing digital space, stealing identity of a
person to gain financial advantages has become easier. So, this is one area where people must learn to be
more cautious to prevent identity theft.

Mike, a marketing professional working in an advertising agency, is well versed with the fact that there are now
a few new weapons to help you battle identity theft. Like Mike, every citizen of this country should be aware
that a federal law gives consumers the right to receive a copy of their credit report once every 12 months free
of charge, or if they are refused credit on an application. This law was designed to encourage Americans to
keep a closer watch on their credit report and reduce identity theft.

IRS Handling of Identity Theft

The Treasury Inspector General for Tax Administration (TIGTA) reported that the Internal Revenue Service
(IRS) failed to investigate thousands of identity theft cases because taxpayers filed an incorrect tax return. The
IRS used Form 3949-A (Information Referral) to report suspected cases of tax fraud in 2012. However, the
instructions were very confusing, and many people used this form to report identity theft cases. The IRS
destroyed those forms because prior to May 2012, there were no procedures in place to process them as
identity theft cases.

Today, there are current IRS procedures in place. If you suspect tax-related identity theft, the correct form to
use is Form 14039 (Identity Theft Affidavit). You can complete and submit Form 14039 online at
IRS.gov/dmaf/form/f14039, or you may print and mail or fax it to the IRS. Note that Form 3949-A is now used
specifically to report suspected tax law violations by others — it is not the correct form for reporting your own
identity theft. As soon as you find out your identity has been compromised, you should contact the IRS
immediately, along with Credit Reporting Agencies, and your ID theft insurance company, if you have that
coverage.

You can report this to the IRS either separately or attached to your tax return. Be sure to also contact everyone
you bank with, do business with, and file personal information with, about the ID theft. Credit bureau reporting
is MORE than just reporting credit card usage and history. It includes ALL types of credit activity. Any type of
loan, Tax returns, Health insurance and Medicare coverages, Driver’s license, passport, and Social Security
information all use credit activity to validate your access to them.

How can we protect ourselves from identity theft? Keep these tips from IdentityTheft.gov in mind:

• File your tax return as early as possible. Fraudsters file early using stolen information in attempts to
  beat the taxpayer to filing. The IRS easily processes the first return filed under a social security
  number- make sure its the legitimate return to avoid delays.
• Any email purporting to be from the IRS is likely a scam. If you have filed online, you will receive emails
  from the Efile website you used confirming that your return has been accepted by the IRS. You will also
  receive payment confirmation emails from the IRS if you pay your taxes online directly to the IRS
  through their Electronic Federal Tax Payment System (EFTPS).

• The IRS will never ask for personal or financial information in an email or over the phone. Never
  provide your social security number, bank or credit card information, or security-related

  information such as your mothers maiden name in an email or on another site through an email
  link you were sent.

• Scammers often use bait to get their victims to respond – dangling promises of extra tax refunds or
  offering payment for participation in an IRS survey. Another tactic involves the use of threats of legal
  action or withholding of refunds. Remember, the IRS will not communicate with consumers for any of
  these purposes via email.
• Be cautious when visiting the IRS website. Always go to https://www.irs.gov directly rather than
  following any email links to the site. There are many false websites impersonating the IRS, waiting for
  unsuspecting consumers to enter their personal information. Common scams often try to direct
  consumers via email to phony IRS sites. Remember that an email links true website address (URL) is
  revealed by moving your mouse over the link.
• If you leave your taxes to the professionals, it pays to be choosy when choosing a tax preparer.
  Unethical tax preparers are making headlines every day for committing tax fraud or identity theft using
  their clients; information. It’s important to check your preparers credentials or licensing. Be sure to only
  use a Certified Public Accountant (CPA), Enrolled Agent (EA), or attorney.
• You may also use either a Credit Freeze or a Fraud Alert on your credit account at the reporting
  agencies to stop the further use of your information to acquire financial access to your accounts. Credit
  freezes are free at all three major credit reporting bureaus under federal law, and a Fraud Alert is also
  free. A Fraud Alert is only necessary to send to one credit agency (www.experian.com/fraud) because
  the other two will be notified. Either method will slow down your use of credit, going forward, because
  you will need to approve or verify your identity before your credit purchase will be accepted. SO,
  remember, this will slow your use of credit!

Income Tax and Social Security Impact of Identity Theft

Remember this: reporting Identity Theft to the IRS will delay your refund, but it will also ensure that you receive
it rather than the ID thief. Chances are you will receive a check, rather than a direct deposit refund into your
checking or savings account. Also, you will receive an Identity Protection PIN (IP PIN) to use when filing future
returns to ensure your return is the correct one. Even if you have not been a victim of identity theft, the IRS
now allows any taxpayer to proactively opt into the IP PIN program at IRS.gov/ippin — this is one of the
strongest protections available against someone else filing a return using your Social Security number.

If you end up spending money to prosecute an identity thief through attorney’s fees or other costs, be aware
that personal theft loss deductions are currently very limited under tax law. Consult your tax professional, as
the deductibility of such expenses depends on your specific circumstances.

Further, if you are a victim of identity theft, you may need to file your tax return on paper. Be sure to attach a
completed and signed IRS Form 14039, along with a copy of your current drivers license or passport, to be
submitted with your original tax return. This will ensure your refund is sent to you and your tax records are
correctly placed in your name. This is also important to make sure your Social Security records reflect correct
information for your benefits later in life.

Here are several steps the IRS suggests you can take to help protect yourself against identity theft:

• Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
• Protect your financial information.
• Check your credit report at least every 12 months.
• Check your Social Security statement or account at least every 12 months.
• Protect your personal computers by using firewalls and anti-spam/virus software, updating security
  patches, and changing passwords for Internet accounts regularly.
• Don’t give personal information over the phone, through the mail, or on the Internet unless you have
  initiated the contact and are sure of the recipient.

Credit Reporting Bureaus and Managing Credit Scores

Equifax, TransUnion, and Experian each are required to provide you with an annual credit file disclosure or
report upon request (therefore, you must ask for it). Now, there are some credit card companies that freely give
your credit score on the monthly credit card statements. On others, you must still request and pay, though, to
get a credit score. It is not part of the new free credit report annual provision.

A tip to increase your credit score, never use more than 30% of the allowed credit limit of your credit
card. Additionally, consider requesting a small credit limit increase semi-annually. This will provide a larger
credit limit and still maintain a high credit score.

Here are some final points to remember:

• All three credit reporting bureaus are required to give an annual credit report (if requested). But
  you must still pay to acquire a credit score from the credit reporting companies
• Ways to get credit reports are as follows:

Visit the website at www.annualcreditreport.com
○ Write to:
Annual Credit Report Request Service
P.O. BOX 105283
Atlanta, GA 30348
○ Call: Toll Free at (877) 322-8228

• Use IRS Form 14039, along with a copy of your driver’s license or passport, to file with your
  original tax return if you are a victim of identity theft. You may also submit Form 14039 online at
  IRS.gov/dmaf/form/f14039. This will ensure your refund is sent to you, and you will be sure your
  income records are corrected with the Social Security Administration.
• Contact your bank, credit card companies, Social Security Administration, and all financial
  institutions you are associated with.
• Consider using either a Fraud Alert or Credit Freeze on your credit report if you have been
  exposed to hacking, theft, or loss. Both freezes and Fraud Alerts are free under federal law.
• Contact your tax professional to seek assistance with instructions.
• Never use more than 30% of your credit card to keep a high credit score.

Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.

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