National Tax Advocate reported that in 2011, use of false identity to collect tax returns has increased to 78% affecting more than 450,000 people. Tax identity theft is defined as misuse of a tax payer’s information without authorization and claiming refunds. The incidence of identity theft usually occurs before filing of tax returns as it delays the possibility of data duplication. If you are an accounting firm in Orlando, it is your responsibility to avoid tax-identity theft of your client.
How is an Identity Stolen?
Some of the ways to obtain information include going through trash cans, hacking into email accounts and listening to telephone conversations. An Identity thief looks for materials such as bank records, receipts and invoices, discarded tax records and documents containing personal and financial return.
Email phishing is another common method which involves a tax payer receiving an email asking for personal information such as tax id, account number and password under the pretext. Many tax payers fall prey to this trick as they are unable to recognize whether the email they have received is from IRS or an identity-thief.
How to Detect Identity-Theft?
There are many filters that you can use to ensure that the identity of your accounting firm Orlando clients remains protected. Firstly, verify the financial information of your client. Using multiple sources such as banks and references from landlord or an employer can help you gain an idea about your clients banking method and the potential areas where his identity is at risk.
Encourage your accounting firm Orlando client to file for an IRS issued IP PIN. In case your client’s identity is stolen, your client will be issued a Personal Identification Number which will be used to differentiate a legitimate payer from an identity thief. Have your clients use a masked Social Security Number which enables your client protection with minimal disclosure.
Reconcile your client’s credit card statements with their personal record on monthly basis. Also, monitor credit reports from your client’s bank in case of any unidentified transaction.
Educate your accounting firm Orlando clients to adopt simple security measures such as avoiding to respond to any unsolicited email and forwarding you any communications received from IRS.
Ask your client to store their financial information in a locker and to immediately destroy any unused document with information containing your client’s details. You can also advise your clients to avoid giving any irrelevant information while conducting business especially on Internet and using a shredder to discard any documents containing such information.
While surfing online it is important to advertise your client to use firewalls and install anti-theft software that informs you of potential security threats to your data and avoids any third party host from attempting to hack into your data.
Tax-Identity theft is the most common crime in America and affects millions of people. To protect your clients’ data ensure that all you use data encryption softwares and digitally protect your hardware to avoid any misuse of confidential data.
If you need more information about our accounting and tax services, please contact us at 407-344-1012. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, and Hunters Creek, FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt status applications.