Feb 10, 2008

Identity Theft and Taxes: the finale- Prevention

In a previous blog entry, I stated that "an ounce of prevention beats a pound of cure" does not help when you find out about identity theft in your taxes some 12-18 months after it happens. However, it does help to have a ID Theft solution that will notify you of uses of your social security number in other areas. Also, it helps to have the phone numbers and areas you need to contact at a moments notice.

Identity theft can be a low-tech crime. Hence, there are many simple, non-technical prevention techniques. Shredding importing documents, monitoring and limiting your paper mail, password stealing, and other "dumpster diving" methods can all be achieved with a change in your document protection procedures.

However, identity theft is also an increasingly a high-tech crime with use of data files and internet theft. This requires limiting the use of your private information, namely your social security number in tax debt issues, for others to see. Do not provide your SSN to anyone on-line. Phishing sites are common and can look like legitimate sites. Obviously, never to tell anyone your password is must.

Use a credit monitoring service (all three credit agencies)- they will notify you of uses of your credit. If you credit is compromised, please note, you should pull the IRS records of your Forms W-2s and 1099s reported to see if there are any inconsistencies. If there are, you will need to be proactive and fix the problem with the IRS.

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