Tax advisers: Filing taxes early may help prevent identity fraud - KSBY.com | San Luis Obispo and Santa Barbara Area News

Tax advisers: Filing taxes early may help prevent identity fraud

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With the first day of the official tax filing season underway, tax advisers and agents across the country are already busy.  They're encouraging clients to file sooner rather than later.

"Late in the season, often times, we'll have people come in to file their taxes and it turns out somebody's already filed their taxes for them," said Master Tax Adviser Karen Hiatt, who works closely with the Internal Revenue Service when issues like tax fraud arise with client filings.

She said, in 2017, cases of tax fraud through stolen identities hit Florida, Georgia, and Washington D.C. particularly hard, but Hiatt saw an increase in cases she dealt with at her San Luis Obispo H&R Block office as well.

"What happens is, we can try to file someone's returns using their social security number and their personal information, and we get this message that return has been filed," Hiatt said.

Hiatt says companies like H&R Block have started asking for driver's licenses or state IDs as an extra step to verify identity before filing taxes, but even that isn't a perfect solution.

"Everyone has to be on their guard," Hiatt cautions. Residents like Amanda Sherlock agree.

"We live in a digital world, anything is possible," said Sherlock. She knows identity theft. Her bank account was compromised and personal information exposed, forcing her to contact the IRS to prevent further damage.

"Actually, I was pick-pocketed a few years ago and the IRS sends me a letter every year at this time giving me my secret code for when I file my taxes," Sherlock explained.

That secret code is known as an Identity Protection PIN. It is a unique, six-digit code assigned once each tax season to prevent the fraudulent use of an individual's social security number or personal information in filing taxes.

Those six numbers give people like Sherlock a sense of confidence in filing their taxes.

"The IRS said, 'Anytime you file your taxes, put this secret number in and you'll be good.'"

Hiatt says if your taxes are fraudulently filed, the IRS will request further information to verify your identity to prove you hadn't filed your own taxes yet. Once that verification is complete, the IRS will manually process your taxes before filing a tax refund, which could take six weeks or more.

If you've been a victim of identity theft, you can apply for an Identity Protection PIN by visiting IRS.gov.

It should be noted that the new tax law recently signed by President Trump does not affect this tax filing season.

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