Use 2FA + Other Tips To Avoid Tax-Related Identity Theft

Use 2FA + Other Tips To Avoid Tax-Related Identity Theft

Most American taxpayers don’t think much about tax fraud, identity theft, and financial account security despite fairly regular news coverage of highly publicized hacks. Too bad, because incidences of identity theft skyrocket at tax time, and while the Internal Revenue Service takes steps to reduce criminal activity, a pattern of poor practices leaves many online users vulnerable.

A General False Sense Of Security

According to data security firm CyberScout, taxpayer ignorance of necessary safeguards is leading to a false sense of security. In their “Tax Season Risk Report” released by the firm cited:

• 58% of US taxpayers aren’t worried about tax fraud, despite 649,000 confirmed fraudulent returns attempting to obtain $3.1 billion in refunds in 2018.
• Only 35% demand that their tax preparers use 2FA to protect their info.
• Only 18% encrypt important documents like tax worksheets, W-2s, 1099s or 1040s.
• 38% store unprotected tax documents on their computer’s hard drive, leaving them susceptible to even the simplest of hacks.
• 57% file taxes very close to the tax deadline, giving hackers more time to impersonate them online and steal their refunds.

Some Tips

So what can average tax-paying citizens do to protect themselves? 

• Always use complex passwords. And don’t reuse them on multiple accounts. Fraudsters know that data retrieved from one hack is likely to be used elsewhere, and check stolen credentials on all the major financial institutions.
• Enable two-factor authentication on every account that matters. And only work with tax preparers who also use 2FA to protect their client’s data.
• Be wary of pop-up storefronts offering tax preparation services. Many are elaborate scams.
• Moving sensitive tax documents to encrypted USB drives.
• File taxes early.
• Password protect your private Wi-Fi connection. Stay off public Wi-Fi.
• If someone contacts you online or by phone asking you to authenticate your ID, don’t do it. The IRS never reaches out this way.
• Refund checks delivered to home mailboxes are at risk, as only 29% of those receiving refunds have a have a locked mailbox. If you’re lucky enough to be getting a refund, ask for it to be sent electronically via direct deposit.
• Consider filing your taxes with an online service that offers 2FA, such as TaxACT.
• And finally, don’t bake those personal elements into your passwords and answers to online security questions. Things like zip codes and pet names can be easily gleaned from social media and used to attack your accounts. If you share it on social media, don’t use it in a password.

2FA 4 ALL

It takes no time at all to secure all your important accounts with two-factor authentication. Twilio’s Authy 2FA has been rated “Excellent” by PC Magazine, and it’s easy to download and install:

• Get Authy for iOS
• Get Authy for Android
• Get Authy for Desktop

And, to find out about the current tax scams and cyber-attacks, visit the federal website on consumer alerts.