IRS officials sent notices to tax professionals recently apologizing for a delay which the agency says will only affect some early filers – but if you filed after January 26, you’re in the clear.

The reason for the delay was issues with the agency’s newly-installed filters, which are designed to prevent tax fraud and identity theft. The delay was expected to only last about a week, although some have found that their refunds will be delayed by as much as two weeks.

The delay has caused concern among tax preparation chains like Jackson Hewitt and H&R Block. Both have been fielding calls from anxious taxpayers counting on their refunds. The chains have also been offering less refund anticipation loans, or rapid refunds, because of the delay.

The IRS has been working for the past year to step up its efforts to prevent identity theft by installing these new filters in its computer systems, which the agency hopes will catch identity theft attempts before refunds are issued. The changes came after the IRS was pressured by Congress and the National Taxpayer Advocate, as well as the Tax Inspector General for Tax Administration.

In years past, the IRS has issued millions of dollars in tax refunds based on fraudulently filed tax returns. The newly-installed filters are supposed to increase the IRS’ ability to spot bogus tax returns before they are processed and before a refund is issued.

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While your rummaging through the drawer, looking for all your receipts to get ready to file your income tax, you can bet scam artists are also hard at work figuring out ways to steal your personal information. Identity thieves are particularly active during tax season because your tax return contains all the information they need – your Social Security number, name, address, work information, investment accounts – to commit identity theft.

There are some precautions you should take to stay a step ahead of the bad guys.

• Never respond to an e-mail claiming to be from the IRS. The IRS does not send e-mails about your tax return. Ever. Be skeptical of e-mails claiming to be from a tax preparation firm also. These are very likely phishing scams, used to obtain your personal information by asking for it in order to file your return or process your refund. You should also be cautious about letters. Call the IRS if you receive a letter asking for additional information in order to process your claim. Go online at www.irs.gov and obtain the telephone number to verify the letter – do not call any number listed on the letter.

• Be careful who you work with. You’ll be providing an awful lot of personal information to your tax preparer, so be extra vigilant about verifying his or her credentials. Look for someone who’s been in the business for a long time, and verify them through the IRS.

• Keep your tax files secure. Be particularly careful with computer security when dealing with your tax files.

• Be careful with your Internet connection. Don’t do your taxes on a public computer, and don’t send tax information through an unsecured wireless connection.

• Be careful when you dispose of tax files. When you get rid of physical tax files and supporting documents, make sure you shred before you throw them out.

And remember, when you eventually dispose of your computer, whether you trash it, sell it or give it away, make sure that your tax files, as well as other personal files, are gone. Use a program that wipes the information off the hard drive, and then reinstall the operating system with the original disks that came with the computer.

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Identity theft and tax season

It’s tax season. It’s an annual occurrence, happening at the same time of year, every year. And in observance, here’s our annual phishing, scamming and identity theft warning with tips for avoiding getting taken to the cleaners … by anyone but the IRS.

Your mailbox

• If you don’t already have one, buy a locking mailbox before your W2 is delivered. Just think how easy it is to commit identity theft with just that one piece of stolen mail.
• If you’re going to mail in your tax return, don’t leave it in your mailbox. Instead, mail it from the post office or US Postal Service mailbox.
• Employers are required to send W2s by January 31. If you haven’t received yours within a few days after that date, call your employer to confirm it was mailed. If so, immediately order a credit report to see if you’re already an identity theft victim. Contact the IRS to alert them that your W2 may have been stolen.

Your phone

• The IRS would never call you asking for personal information regarding your taxes – that would be too fast and easy. If someone calls under this pretense, it’s a sure bet they’re vishing and are bent on identity theft.

Your computer

• Most people files their taxes over the Internet, leaving millions of people vulnerable to phishing scams. Just like the IRS would never contact you by phone requesting your personal or financial information, it would never email you asking for it either.
• Scammers often include a “click here” link within their emails. Never click on it. If you do you’ll likely be led to a website that will deliver spyware to your computer to commit identity theft.
• Using file-sharing software leaves your computer and all the information on it wide open to identity theft. If you share your computer with other people, make sure they know not to install file-sharing software for music or movie downloads.

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