Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

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rav2fi
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Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by rav2fi » Mon Sep 11, 2017 11:36 am

I think this is going to be another issue that's going to come out of all the information leak. As far as I know, to file electronically, one needs to know our previous years AGI but they can always send in a paper application with fake numbers and address to get the return.

I usually wait until end of Feb, early March to file my return as I usually don't have all of my tax documents until then, therefore filing early is not possible.

So what's the best way to protect ourselves?

miles monroe
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by miles monroe » Mon Sep 11, 2017 11:54 am

if you live in fl, ga, or dc you can apply to the irs for a pin. hopefully this program will be expanded to all states.

mhalley
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by mhalley » Mon Sep 11, 2017 12:12 pm

Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.

wfrobinette
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by wfrobinette » Mon Sep 11, 2017 12:28 pm

mhalley wrote:
Mon Sep 11, 2017 12:12 pm
Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.
From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.

new2bogle
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by new2bogle » Mon Sep 11, 2017 12:36 pm

wfrobinette wrote:
Mon Sep 11, 2017 12:28 pm
mhalley wrote:
Mon Sep 11, 2017 12:12 pm
Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.
From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.
How would that work? Doesn't the IRS cross check the W2 you input vs. what they get from the employer?

pochax
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by pochax » Mon Sep 11, 2017 12:37 pm

wfrobinette wrote:
Mon Sep 11, 2017 12:28 pm
mhalley wrote:
Mon Sep 11, 2017 12:12 pm
Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.
From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.
i think the benefit of the advice from mhalley is not for the sniping refund, but it's so that you are not forced to wait for a big refund that you were counting on when the IRS realizes your identity was stolen. i have heard that people who have had their IDs stolen on tax returns have had to wait 12-18 months to get their refund. if you owe nothing or a small amount, waiting for that refund wouldn't be an issue. i would assume you would be able to prove to the IRS you did not take the fraudulent refund that was issued so that's on them, not you.

miles monroe
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by miles monroe » Mon Sep 11, 2017 12:47 pm

my college age son had a fraudulent return filed in his name. he had about a $1,000 refund coming which was big money to him. he had to wait about 6 months -- much better than some of horror stories we heard. he now has the pin as a result of this situation. the strategy mentioned above to attempt to get a minimal refund or small balance due is a good one.

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Kalo
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by Kalo » Mon Sep 11, 2017 1:00 pm

What about setting up to owe the IRS a large payment and hope you get hacked and the hacker pays the amount due for you! Take that, hackers!

Just kidding of course.

What a wonderful world that would be though.

Kalo
"When people say they have a high risk tolerance, what they really mean is that they are willing to make a lot of money." -- Ben Stein/Phil DeMuth - The Little Book of Bullet Proof Investing.

notmyhand
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by notmyhand » Mon Sep 11, 2017 1:10 pm

new2bogle wrote:
Mon Sep 11, 2017 12:36 pm
wfrobinette wrote:
Mon Sep 11, 2017 12:28 pm
mhalley wrote:
Mon Sep 11, 2017 12:12 pm
Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.
From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.
How would that work? Doesn't the IRS cross check the W2 you input vs. what they get from the employer?
No, it doesn't happen automatically. The IRS is trying to get their cross checking to happen sooner which is why W2s are now due to them in January instead of later in the year but no, they basically send out refunds before the cross checking happens. Otherwise people would have to wait for their refunds and we certainly can't have that...

rkhusky
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by rkhusky » Mon Sep 11, 2017 1:34 pm

The IRS could do some other stuff even before getting the W2, like checking to see whether your information has changed much from previous years, such as address, number of dependents, wages, interest, investment income, etc. They could even add something to the return, such as requiring people to list the previous year's refund/payment and/or AGI or some other line on the form. If the info didn't match, any refund would be delayed. That would require ID thieves to gather much more information to be successful.

HIinvestor
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by HIinvestor » Mon Sep 11, 2017 1:39 pm

Our CPA files our return electronically and we haven't filed a paper return in many decades. Our cpa has our PIN. Hopefully the IRS won't let anyone blithely change things.

new2bogle
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by new2bogle » Mon Sep 11, 2017 1:46 pm

notmyhand wrote:
Mon Sep 11, 2017 1:10 pm
new2bogle wrote:
Mon Sep 11, 2017 12:36 pm
wfrobinette wrote:
Mon Sep 11, 2017 12:28 pm
mhalley wrote:
Mon Sep 11, 2017 12:12 pm
Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.
From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.
How would that work? Doesn't the IRS cross check the W2 you input vs. what they get from the employer?
No, it doesn't happen automatically. The IRS is trying to get their cross checking to happen sooner which is why W2s are now due to them in January instead of later in the year but no, they basically send out refunds before the cross checking happens. Otherwise people would have to wait for their refunds and we certainly can't have that...
So I can request a $3 million refund and abscond to Panama before the IRS finds out? There has to be some security mechanism there...

MarkNYC
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by MarkNYC » Mon Sep 11, 2017 1:53 pm

new2bogle wrote:
Mon Sep 11, 2017 1:46 pm
notmyhand wrote:
Mon Sep 11, 2017 1:10 pm
new2bogle wrote:
Mon Sep 11, 2017 12:36 pm
wfrobinette wrote:
Mon Sep 11, 2017 12:28 pm
mhalley wrote:
Mon Sep 11, 2017 12:12 pm
Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.
From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.
How would that work? Doesn't the IRS cross check the W2 you input vs. what they get from the employer?
No, it doesn't happen automatically. The IRS is trying to get their cross checking to happen sooner which is why W2s are now due to them in January instead of later in the year but no, they basically send out refunds before the cross checking happens. Otherwise people would have to wait for their refunds and we certainly can't have that...
So I can request a $3 million refund and abscond to Panama before the IRS finds out? There has to be some security mechanism there...
When a federal tax refund exceeds a certain dollar threshold, I believe the IRS will give the tax return additional scrutiny before releasing the refund. But I agree that the IRS should develop some extra security measures to prevent the processing of fraudulent tax returns.

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celia
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by celia » Mon Sep 11, 2017 1:57 pm

HIinvestor wrote:
Mon Sep 11, 2017 1:39 pm
Our CPA files our return electronically and we haven't filed a paper return in many decades. Our cpa has our PIN. Hopefully the IRS won't let anyone blithely change things.
Your CPA doesn't HAVE your PIN. Your CPA GENERATES your PIN for you each year.
IRS wrote:When self-preparing your taxes and filing electronically, you must sign and validate your electronic tax return by entering your prior-year Adjusted Gross Income (AGI) or your prior- year Self-Select PIN. Using an electronic filing PIN is no longer an option. Generally, tax software automatically enters the information for returning customers. If you are using a software product for the first time, you may have to enter the information yourself.
https://www.irs.gov/individuals/electro ... in-request

wfrobinette
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by wfrobinette » Mon Sep 11, 2017 2:12 pm

MarkNYC wrote:
Mon Sep 11, 2017 1:53 pm
new2bogle wrote:
Mon Sep 11, 2017 1:46 pm
notmyhand wrote:
Mon Sep 11, 2017 1:10 pm
new2bogle wrote:
Mon Sep 11, 2017 12:36 pm
wfrobinette wrote:
Mon Sep 11, 2017 12:28 pm


From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.
How would that work? Doesn't the IRS cross check the W2 you input vs. what they get from the employer?
No, it doesn't happen automatically. The IRS is trying to get their cross checking to happen sooner which is why W2s are now due to them in January instead of later in the year but no, they basically send out refunds before the cross checking happens. Otherwise people would have to wait for their refunds and we certainly can't have that...
So I can request a $3 million refund and abscond to Panama before the IRS finds out? There has to be some security mechanism there...
When a federal tax refund exceeds a certain dollar threshold, I believe the IRS will give the tax return additional scrutiny before releasing the refund. But I agree that the IRS should develop some extra security measures to prevent the processing of fraudulent tax returns.
They say they have some measures it place but won't disclose them for obvious reasons.

mhalley
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by mhalley » Mon Sep 11, 2017 5:22 pm

I didn't mean to imply the fraud was sniping your refund, the purpose of setting things up was to prevent the inconvenience of having to wait up to 6 months to get the money. If someone was counting on a large refund the delay could throw a wrench into their vacation, new car purchase, etc.
Of course ideally everyone has an emergency fund, credit cards as a backup, etc, but if something bad happened (job loss, illness, natural disaster, etc) the six month delay of money you were counting on could be a big problem.
http://money.cnn.com/2016/06/06/pf/taxe ... index.html

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BolderBoy
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by BolderBoy » Mon Sep 11, 2017 6:58 pm

rkhusky wrote:
Mon Sep 11, 2017 1:34 pm
They could even add something to the return, such as requiring people to list the previous year's refund/payment and/or AGI or some other line on the form. If the info didn't match, any refund would be delayed. That would require ID thieves to gather much more information to be successful.
Aren't they already doing this? I noticed that the last several years of filing with Turbotax I've had to enter my EXACT AGI when submitting the returns. Happened with mom's returns when I filed them with TT, too.
“Where you stand, depends on where you sit” - Rufus Miles | "Never underestimate one's capacity to overestimate one's abilities"

Osp62
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by Osp62 » Mon Sep 11, 2017 8:06 pm

I tried to get a PIN two years ago (FL resident) but was in ble to get it and was told by my CPA that it was most likely because I had frozen my credit. I did not want to unfreeze my credit for the Irs so did not end up getting the pin.

Wondering if anyone has been able to get a PIN with their credit frozen. Don't even understand why the IRS needs to check credit but I was definitely unable to get the pin in 2015.

rkhusky
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by rkhusky » Mon Sep 11, 2017 8:15 pm

BolderBoy wrote:
Mon Sep 11, 2017 6:58 pm
rkhusky wrote:
Mon Sep 11, 2017 1:34 pm
They could even add something to the return, such as requiring people to list the previous year's refund/payment and/or AGI or some other line on the form. If the info didn't match, any refund would be delayed. That would require ID thieves to gather much more information to be successful.
Aren't they already doing this? I noticed that the last several years of filing with Turbotax I've had to enter my EXACT AGI when submitting the returns. Happened with mom's returns when I filed them with TT, too.
Perhaps ID thieves aren't using Turbotax and I don't recall seeing anything special on my paper forms.

The fact that someone can file a hundred returns using the same address and get refunds on untraceable debit cards tells you all you need to know about the quality of the IRS's security.

littlebird
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by littlebird » Mon Sep 11, 2017 8:26 pm

wfrobinette wrote:
Mon Sep 11, 2017 12:28 pm
mhalley wrote:
Mon Sep 11, 2017 12:12 pm
Aside from the standard I'D protection, arrange withholding/estimated taxes so you get a minimal refund. You could file early before you get all of your documents and then file an amended return, but I don't know if it would be worth the hassle.
From what I understand the fraud is not sniping your refund. It's using your or a dependents SS# to file a bogus return with made up W2 info and made up dependents. While it's good practice to adjust w4 to have as close to zero tax liability as possible it doesn't stop tax ID fraud.
It won't stop it, but it will lessen the anxiety surrounding your refund check not arriving.

I'm arranging my finances so that I owe them a non-penalty inducing sum. It's fairly easy for me, since I only have withholding taken once, from my IRA at the end of the year.

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BogleFanGal
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by BogleFanGal » Mon Sep 11, 2017 9:53 pm

I tried to get a PIN two years ago (FL resident) but was in ble to get it and was told by my CPA that it was most likely because I had frozen my credit. I did not want to unfreeze my credit for the Irs so did not end up getting the pin. Wondering if anyone has been able to get a PIN with their credit frozen. Don't even understand why the IRS needs to check credit but I was definitely unable to get the pin in 2015.

Not me. I've given up on trying to file electronically - I file every annual tax return and quarterly estimate by snail mail - I have no choice. I've tried filing electronically and IRS rejects every attempt: I've used AGI, their own provided pin codes. I've been on the phone with them - sat on long hold times been transferred to diff divisions/agents. They themselves admit they don't know why it keeps getting blocked and just keep passing the buck - telling me to escalate my concern to someone else. I decided I've wasted too many hours and life is just too short- so I just keep mailing it in.

Zonian59
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by Zonian59 » Mon Sep 11, 2017 10:29 pm

Given the Equifax fiasco:
1) Am I LESS at risk if I file via snail mail than electronically? I usually file via snail mail anyway.
2) Is it risky to have refund deposited to checking account via ACH Deposit? Or should I have refund sent via snail mail?
Thanks.

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dmcmahon
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by dmcmahon » Mon Sep 11, 2017 11:36 pm

Zonian59 wrote:
Mon Sep 11, 2017 10:29 pm
Given the Equifax fiasco:
1) Am I LESS at risk if I file via snail mail than electronically? I usually file via snail mail anyway.
2) Is it risky to have refund deposited to checking account via ACH Deposit? Or should I have refund sent via snail mail?
Thanks.
The Equifax breach shouldn't affect the electronic methods of filing and payment/refund. The chief danger is someone impersonating you IMO.
If you use snail mail to send your return I wouldn't leave it in a mailbox with the flag up, where it could easily be stolen - drop it in a blue box or turn it in to the post office in person. The refund check could likewise be stolen from an unlocked mailbox. IMO the electronic methods are therefore just slightly safer.

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randomizer
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by randomizer » Tue Sep 12, 2017 12:28 am

I will owe taxes, I expect, so not too worried. What a silver lining.

FedGuy
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by FedGuy » Tue Sep 12, 2017 6:14 am

Osp62 wrote:
Mon Sep 11, 2017 8:06 pm
I tried to get a PIN two years ago (FL resident) but was in ble to get it and was told by my CPA that it was most likely because I had frozen my credit. I did not want to unfreeze my credit for the Irs so did not end up getting the pin.

Wondering if anyone has been able to get a PIN with their credit frozen. Don't even understand why the IRS needs to check credit but I was definitely unable to get the pin in 2015.
The IRS ePIN site is problematic. They routinely take the site down, without notice and often for months at a time--and nearly always in the last few months of the year--for "maintenance." I'm a DC resident who had to keep coming back to the site over the course of about 6 months before I finally found it active and ready to go. Once that happened, it worked for me without a problem. I had already frozen my credit and don't remember if I needed to do an unfreeze or not, but unfreezing for a day to sign up for the ePIN isn't that big of a deal.

miles monroe
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by miles monroe » Tue Sep 12, 2017 8:04 am

Osp62 wrote:
Mon Sep 11, 2017 8:06 pm
I tried to get a PIN two years ago (FL resident) but was in ble to get it and was told by my CPA that it was most likely because I had frozen my credit. I did not want to unfreeze my credit for the Irs so did not end up getting the pin.

Wondering if anyone has been able to get a PIN with their credit frozen. Don't even understand why the IRS needs to check credit but I was definitely unable to get the pin in 2015.
i had to thaw my credit when i set up my medicare or social security account on the web (don't recall which it was). the rejection notice did not say why -- i had to call customer service. the customer service rep was able to tell me which one of the three i needed to thaw.

miles monroe
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by miles monroe » Tue Sep 12, 2017 8:10 am

BogleFanGal wrote:
Mon Sep 11, 2017 9:53 pm

Not me. I've given up on trying to file electronically - I file every annual tax return and quarterly estimate by snail mail - I have no choice. I've tried filing electronically and IRS rejects every attempt: I've used AGI, their own provided pin codes. I've been on the phone with them - sat on long hold times been transferred to diff divisions/agents. They themselves admit they don't know why it keeps getting blocked and just keep passing the buck - telling me to escalate my concern to someone else. I decided I've wasted too many hours and life is just too short- so I just keep mailing it in.
my wife changed her name from "jones-smith" to "smith" when we had kids and i could not e-file after that. the irs matches name and social to social security records and when the change was made something got fouled up at social security. it took a call to social security to get everything resolved.

SimonJester
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by SimonJester » Tue Sep 12, 2017 9:50 am

Zonian59 wrote:
Mon Sep 11, 2017 10:29 pm
Given the Equifax fiasco:
1) Am I LESS at risk if I file via snail mail than electronically? I usually file via snail mail anyway.
2) Is it risky to have refund deposited to checking account via ACH Deposit? Or should I have refund sent via snail mail?
Thanks.
Using snail mail actually increases your risk. The IRS accepts the first return it is sent and processes.
So if you snail mail your return and a fraudster E-Files a fake one the E-filed return will be accepted first and your snail mail return will be rejected by the IRS.

When this happened to my father he did not find out until June or July when he had his accountant call the IRS to see where his refund was. The rejection notice came a few weeks after that.

Until the IRS allows everyone to use the IP PINs your best defense is to owe a small amount each year. Then you are not waiting on the IRS to send you back money, it will be easier to convince the IRS your return is the correct one vs a return with a large refund.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

SimonJester
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by SimonJester » Tue Sep 12, 2017 10:07 am

Ohhh the irony on the IRS web site for obtaining an IP PIN (once you are eligible) :

Credit Security Freeze with Equifax
If you've placed a credit security freeze with Equifax, you must contact Equifax to have the freeze temporarily removed to allow us to verify your identity. Once you have your IP PIN or are no longer attempting to register, you may contact Equifax to resume the freeze unless you scheduled it to resume automatically.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin

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Meg77
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by Meg77 » Tue Sep 12, 2017 10:15 am

randomizer wrote:
Tue Sep 12, 2017 12:28 am
I will owe taxes, I expect, so not too worried. What a silver lining.
Owing taxes will not protect you. Fraudulent tax filers simply use your personal information (name and SSN is really all they need) to file a dummy tax return. They make up W2 figures and plug them in so that it looks like you are owed a refund. They use a different address, file fairly early, and get your refund sent to them.

The IRS does not cross check your W2 info or any other data before issuing refunds, especially if the refunds are under a certain amount. Otherwise it would take months to get your refund as opposed to the typical week or two. Once you go to file your real tax return, it's rejected as a duplicate and then you have to file a fraud claim with the IRS and prove you're really you and wait many months for them to straighten it all out.
"An investment in knowledge pays the best interest." - Benjamin Franklin

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randomizer
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by randomizer » Tue Sep 12, 2017 10:36 am

Meg77 wrote:
Tue Sep 12, 2017 10:15 am
randomizer wrote:
Tue Sep 12, 2017 12:28 am
I will owe taxes, I expect, so not too worried. What a silver lining.
Owing taxes will not protect you. Fraudulent tax filers simply use your personal information (name and SSN is really all they need) to file a dummy tax return. They make up W2 figures and plug them in so that it looks like you are owed a refund. They use a different address, file fairly early, and get your refund sent to them.

The IRS does not cross check your W2 info or any other data before issuing refunds, especially if the refunds are under a certain amount. Otherwise it would take months to get your refund as opposed to the typical week or two. Once you go to file your real tax return, it's rejected as a duplicate and then you have to file a fraud claim with the IRS and prove you're really you and wait many months for them to straighten it all out.
Well, at least they'll have to wait months before I giving me the green-light to pay the taxes that I owe.

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dcnut
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Re: Equifax fiasco - how can we protect ourselves from potential fraudulent tax returns filed on our behalf?

Post by dcnut » Tue Sep 12, 2017 10:37 am

Meg77 wrote:
Tue Sep 12, 2017 10:15 am
randomizer wrote:
Tue Sep 12, 2017 12:28 am
I will owe taxes, I expect, so not too worried. What a silver lining.
Owing taxes will not protect you. Fraudulent tax filers simply use your personal information (name and SSN is really all they need) to file a dummy tax return. They make up W2 figures and plug them in so that it looks like you are owed a refund. They use a different address, file fairly early, and get your refund sent to them.

The IRS does not cross check your W2 info or any other data before issuing refunds, especially if the refunds are under a certain amount. Otherwise it would take months to get your refund as opposed to the typical week or two. Once you go to file your real tax return, it's rejected as a duplicate and then you have to file a fraud claim with the IRS and prove you're really you and wait many months for them to straighten it all out.
We always adjust our estimated tax payments to ensure that we owe a little money to both the feds and the state. Of course this will not protect us from being hacked, but we will never have to wait 6 months for a refund. It also makes it trivial for the IRS to determine who the real taxpayer is. I assume that the IRS will never refuse to cash a check attached to a valid-looking tax return. Fortunately, we have never been in this situation.
Glenn

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