Americans at Risk of Identity Theft as They File their Tax Returns (betanews.com)

Ian Barker, writing for BetaNews: As we move into the tax return season a new study reveals that attitudes to identity theft and a pattern of poor practices are leaving much of the public vulnerable. Data security and ID theft protection company CyberScout has carried out its second annual Tax Season Risk Report and finds 58 percent of Americans are not worried about tax fraud in spite of federal reports of 787,000 confirmed identity theft returns in 2016, totaling more than $4 billion in potential fraud. Among other findings are that only 35 percent of taxpayers demand that their preparers use two-factor authentication to protect their clients' personal information. Less than a fifth (18 percent) use an encrypted USB drive to save important documents like tax worksheets, W-2s, 1099s or 1040s. And another 38 percent either store tax documents on their computer's hard drive or in the cloud, approaches that are susceptible to a variety of hacks.

Comments

Re:Top problem: No direct upload to IRS

[Malizar]

I prepare taxes for a living, and I can assure you that my client's data is as secure as data can be made. However once the data is sent to the IRS all bets are off. http://www.cbsnews.com/news/ir...

So what are we to do?

[ugen]

"And another 38 percent either store tax documents on their computer's hard drive or in the cloud, approaches that are susceptible to a variety of hacks." - really? So, other than a local storage ("hard drive") or remote storage ("cloud"), what other approaches are there to storing documents that are not susceptible to any hacks? Paper printouts? :) This article is brought to you by association of paper manufacturers.

Encrypt your hard drive, choose good passwords for your cloud storage and don't share them with others. Your data is at most risk at your doctors office, btw (where they have all of your personal information, along with SSN and family records). I had 2 notifications of personal information theft from doctor's billing processor's offices in the last 2 years.

scare mongering getting old

[Anonymous Coward]

All these individual security tactics are NOT where the problem lies. You can encrypt your drives, use TFA, and shred all the paper. But thieves steal the enitire DB at Intuit or irs.gov. American attitudes are properly aligned. We don't control the databases where most theft occurs.

Re:scare mongering getting old

[ShanghaiBill]

All these individual security tactics are NOT where the problem lies. ... But thieves steal the enitire DB at Intuit or irs.gov.

You are correct that "individual security" is not the problem, but DBs are not the problem either. The real problem is the idiotic notion that SSNs can be both widely known and secret. I am required to provide my SSN to my employer, my bank, my doctor, my state government, etc. Yet mere knowledge of that number is supposed to authenticate my identity? That makes no sense.

Re:scare mongering getting old

[Jason Levine]

Another problem are credit companies who treat identity theft with a shrug and a "that's your problem." Someone obtained my name, SSN, DOB, and address. How, I'll never know. They opened a Capital One credit card in my name. The fact that the mother's maiden name was wrong on the form wasn't a red flag. Neither was the immediate address change to another state. Nor was "my wife" calling to request a $5,000 cash advance before the card was activated.

When the card arrived at my house (a lucky quirk of them paying for rush delivery and THEN changing the address), I called CapitalOne. First, they insisted that it couldn't have been fraud, asking if my wife opened it without my knowledge. (She was next to me, freaking out about the situation. That'd be a no.) Then, they admitted that it might be fraud, closed the card out, but refused to give me more information. They literally told me "If we give you the address on the account and you go there and shoot them, we'd be liable." Apparently, they didn't think anything about liability if they opened an account under my name, ignoring a lot of red flags. They even stone-walled the police - telling them to call one phone number that was "manned" by an answering machine whose messages were never returned.

Eventually, I gave up on trying to push the investigation forward and just froze my credit. For all I know, the thieves who stole my identity are still out there racking up debt on other people's credit.

Re:scare mongering getting old

[rtb61]

Reality is "Identity Theft" is a purposeful lie produced by public relations and marketing agencies to push the burden of the crime from the banks to individuals. It is a lie. The reality is the fraud is not against the individual the fraud is against those who accept that false identity. Why the shift, so you the ignorant mug punters get stuck with the loss and the banks wander off laughing.

The truth is, when you get hit by a false claim, you are entitled to seek the prosecution of those who attempted to make that false claim. By any reasoned justice those who made the false claim against you must now prove they were defrauded by another party, else be charged with fraud themselves. It should never ever be up to you to prove anything, you should just be able to forward a complaint of false fiscal claims against you as fraud to the authorities and let them deal with it.

Of course the banks would end up with the bill, hence the scam of identity theft, where you the innocent party and now liable for the corrupt stupidity of the banks until you can prove your innocence, can you not see the criminal corruption in that.

I suspect

[fredrated]

they can't hack the paper forms I mail in.

Re:I suspect

[ShanghaiBill]

they can't hack the paper forms I mail in.

They can as soon as the forms are scanned, and your info is inserted into the same DB as everyone else.

Re:Top problem: No direct upload to IRS

[bugs2squash]

a statement like "I can assure you that my client's data is as secure as data can be made" would be a big red flag to me.

Re:Thankful to the Donald we don't have to file

[Jason Levine]

Not paying your taxes makes you smart!*

* Only applies to billionaires. Attempts to apply this to someone in the middle class may result in jail time.

Fraudulent 1040 filed for me last year

[Poisonous Drool]

On March 30, 2016 someone filed a fraudulent return with a refund going to a debit card. I found out when the IRS returned a payment. It's been a big headache with lots of paperwork. Only one of the credit bureaus accepted my paperwork to freeze my credit. The others gave bogus reasons for rejecting my application. My bank couldn't handle a auto loan. My suggestion: file your taxes early before the criminals can.

Another reason to scrap the income tax

[moeinvt]

Yet another good reason why we should abolish the personal and corporate income tax in favor of the fair tax The fair tax is a consumption tax, but avoids any disproportionate impact on the poor by providing a pre-paid tax credit in the amount that a poor person would pay in taxes over the course of a year.

Everyone understands that taxation creates a disincentive for particular behavior, which is precisely why tobacco is taxed at such ridiculous levels. Why the hell do we tolerate a tax system which creates a disincentive for working and producing things?

Eliminating the ridiculously complex, multi-thousand page income tax code also gets rid of the government's favorite and most convenient mechanism for handing out favors to wealthy special interests. It creates an incentive for businesses to invest in the U.S. & makes U.S. goods more competitive vs. imports ... and of course we would be far less vulnerable to this sort of tax fraud.