Back in early April when I was wrapping up final client questions with our CPA partner, Jennifer Schmitz from Beyond Accounting, she alerted me to an issue with my own tax return.  By the time we have hit April, SourceUP has already completed a long list of filings, reviews, and sign offs for each of our clients.  Typically, the SourceUP and the Martin household are pretty simple but not this year!  Jennifer communicated to me that our personal tax return had been rejected from the IRS which was filed electronically.  I was optimistic that she just needed to hit “send” again (wishful thinking!).  She told me that someone else had already filed taxes with my eldest’s social security number.   It was bouncing back as a duplicate because another filer had claimed our oldest child as theirs!  Yes, for real.  And after uncovering the issue, it turns out that they claimed two of our three children creating a duplicate in the system.  This was tax fraud I did not see coming our way. 

Jennifer informed me that this has been the worst year on record for tax fraud that they have seen.  If you are thinking right now, well they will know how to find this person, yes, you are right.  Some people don’t think these things through clearly! 

If you are breaking out in hives thinking about how this could have happened and how did our kid’s social security numbers get in the hands of others, you are not alone!  It feels inevitable that our personal information will be compromised sometime in our lifetime.  This is not the first time we have had a data breach, and I want to outline what you can do to help avoid this situation.  Let this be a live and learn situation that you don’t have to live on your own.  (You’re welcome ;-))

Tips For Avoiding Tax Fraud

1. Create an ID.me account with the IRS – this will verify your identity in about 10 minutes and each year it will create a 6 digit pin that will be unique that must be submitted with your annual taxes.  In our case, now we will get a 6 digit pin for each of our children as well.  This is one of the easiest ways to create additional security for tax filing.  This is a MUST DO!
2. Put a credit freeze on your children/minors to avoid anyone opening items with their identity.  You can learn more if you search this topic “Credit Freeze Minors” and follow instructions to write into the three credit bureaus to request the freeze. 
3. Utilize the alerts system on your checking account and credit cards that alert you to transactions over a certain dollar amount.  This will allow you to keep a close track on fraudulent charges. 
4. Change passwords frequently for all personal information on platforms such as online banking, credit cards, loans, health insurance, personal health portals. 
5. Use a password generator for all online portals of randomly chosen letters/numbers/symbols.
6. Even though it is easy, do not reuse passwords. 
7. Use a password database that keeps items safe, rather than saving them in notes on your phone.  We use LastPass for SourceUP. 
8. Turn on Multifactor Authentication (MFA) for as many things as you can.  This is the second layer of verification (text to a phone, Google Authenticator, etc.). 

If you have other suggestions on how to maintain controls and build safeguards for better personal information safe keeping, please email me at hello@sourceupindy.com so I can share them.