The annual gathering of receipts, W2s and 1099s and the filing of taxes is bad enough. But getting a message from the IRS that someone has already filed under your name has the potential to make any day go from bad to worse.
This form of identity theft occurs when a criminal acquires an individual’s social security number for the purpose of filing a fraudulent tax return. Though certainly not the only form of identity theft, it has been among the most popular in recent years, and this makes it a common cause of concern and conversation, especially during tax time.
Historically, the most popular choice for criminals who specialize in this segment has been to steal personal information - such as social security numbers, birthdates, hometowns, first pets, etc. - in hopes of opening a new credit card or accessing an existing account. Companies that have built a business around monitoring and protecting individuals from identity theft sometimes make it seem as if the problem is a common occurrence.
The reality of the situation is that identity theft only affected a little more than six percent of Americans last year, according to a study by Javelin Strategy and Research. Those who were unlucky enough to be a part of that crowd might have been happy or at least surprised to find out that it is most often the banks and credit card companies that have to eat the costs of identity theft and fraud, since the account holder’s liability is usually limited in the terms and conditions.
This does not mean it would be a good idea to be careless with your personal information.
Instead of paying for an expensive monthly service, however, it could be worthwhile to explore the following easy, do-it-yourself techniques for protecting your identity: