We’ve all heard about identity theft in the news: someone steals a credit card number and buys six Luther Vandross tickets on the other side of the country, and your credit card company calls you to ask if it’s you. It’s not. You have no idea how anyone got your card number, but the company blocks the purchase and you’re issued a new card number, or you change your PIN and forget about it except as an amusing anecdote to write in blog posts years later because you didn’t even know who Luther Vandross was.
Tax identity theft is similar but can have much more unpleasant ramifications. If someone steals your Social Insurance Number, they can use it to steal everything from your bank records to, yes, your tax refund. Protecting your SIN is obvious, but how do you do that? Today we’re sharing tips for Tax Identity Theft Awareness Week.
Tip #1: File Early
File early in the season via a secure connection or mail your return from the post office directly to get your return faster. In order to prevent thieves from having time to get your SIN or your refund, do your taxes early. Always make sure you’re using a secure Internet connection to e-file, and in order to circumvent old-fashioned thieves, use a post office. Not only will this protect your tax information, but you’ll also get your refund faster!
Tip #2: Know Who to Contact
Do you know what to do if you think your SIN has been stolen? Who do you contact? If you think your SIN has been stolen, contact the police and Services Canada. There are more--your credit card company, your bank, your employer, and so on, but those are the two to start with. Find out more about protecting your SIN from the Canadian Government.
Tip #3: Know Scams
The CRA will never telephone you to ask for payment. They will mail you a letter to respond to. Scammers can rig caller ID's to look like it's an official agency. Never pay your tax bill over the phone. The CRA gives you more information about fraud and identity theft and how to protect yourself on their website.
Tip #4: Know Who Needs Your SIN
If anyone ever asks for your SIN, ask why they want it and what it will be used for, and how they plan to store it and make sure it’s safe. Many private organizations like universities or your mobile phone service provider may ask for your SIN but you aren’t required to give it to them. The practice is discouraged but not illegal. Find out who you must provide your SIN to here.
Tip #5: Be Prepared
Shred any old documents you no longer need to keep. Always research any accountants or tax preparers who will need your personal information. Someone with your SIN could do more than take your money--they can use it to get a job and wreak havoc on your personal records, start a new bank account, and otherwise complicate your life.
Tax identity theft is real and it happens. If you or someone you know is a victim, don’t blame yourself. Contact the appropriate services for help. This blog is presented with thanks to the IRS for these tips and bringing Tax Identity Theft Awareness Week to our attention.
