Reese Henry & Co
Identity Theft - A Continuing Threat
There are few topics that currently appear at the top of news feeds more than identity theft. It seems as if each day we awake to a new infiltration of a large organization by a rogue group from some faraway land. Recently, Yahoo announced that hundreds of millions of users' personal information was compromised. And it seems as if threats like this are not going away.

Identity theft has been occurring for some time now. One of the earlier versions of identity theft involved college students who filed fake tax returns with the IRS by obtaining a person's social security number and filing a return with a false W-2 that created a refund. The perpetrators arranged to have the refunds directly deposited into their accounts.

The IRS has gotten quite a bit more sophisticated in its defense against such actions. One way they've done this is by getting information out to taxpayers regarding safeguards that individuals and businesses can use to reduce the potential for such a fraud.

In a recent publication, the IRS offered some warning signs of possible tax-related identity theft.
  • If the IRS contacts you about more than one tax return being filed for your social security number.
  • If you find that IRS records indicate you received wages or other income from an employer for whom you did not work.
Yes, these are pretty obvious signs that there is a problem. And, if you receive a notification of either situation, it may be too late to prevent a loss. However, the IRS and other security companies have offered some good advice on how to reduce the risk of identity theft.
  • Always use security software with firewall and anti-virus protections on every device that connects in any way to the internet.
  • Always use strong passwords that contain a combination of alphanumeric and special characters.
  • Change your password regularly; creating new passwords every month is no longer considered extreme. It is the norm.
  • Question every email that is not directly from a person you know and trust.
  • Never open an email unless you know the sender - never. And never click on a link in an email from someone you do not know personally. NEVER.
  • Keep all of your personal data physically secure - don't carry your social security card with you; only carry your passport when you absolutely need to; and don't arbitrarily throw paper items that contain your name and address into the trash - shred them.
  • And speaking of credit cards - experts recommend foregoing the convenience of storing your credit card information on your favorite shopping website and entering the information manually each time you buy. It's a bit of a hassle, but it removes the risk of your information being accessible if the company's user information is compromised.
A final note on tax return security - the IRS has determined the false W-2 scam mentioned above is so prevalent (and so easy for scammers to do) that they have made changes to W-2 processing. Now, employers must submit to the government electronic copies of the W-2 forms they issue by an earlier-than-ever date. The IRS has concluded that much of the fraud with false tax returns was made possible by the fact that a large number of tax returns with refunds were filed before February 28th each year, but the IRS did not receive the W-2 information from employers to match to the tax returns filed until March 31st. To address this mismatch, the IRS has now accelerated the filing date for employer information and delayed the date electronic returns will be accepted.

One additional note to employers - the IRS is fully implementing a new system whereby a unique, single-use number will be assigned to each and every W-2 issued by employers. That unique number, in turn, will be required to be input by the employee on their electronically filed personal return. This is designed to help the IRS reduce the number of fraudulent returns filed with false W-2 information. So, be ready.

Finally, please be careful even when communicating with us - with Reese Henry & Company. Please be aware that texting or emailing photos of driver's licenses, credit cards, banking information, social security numbers and, especially, passwords is jeopardizing that information. A more secure way to get information to us is to send the information to us using the secure file upload system on our website, www.reesehenry.com. Just navigate to our website and click the button at the bottom right that says "SECURE FILE TRANSFER". You can send images, information, etc. much more securely using this link.

Suffice it to say, computer hacking and identity theft are here to stay. But, with good habits and constant vigilance we can reduce the chances by a significant amount. If you have any questions about this or any other topic, we're always here to help - just give us a call.
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Reese Henry & Company
Phone: 970.925.3771  |  Email: Info@ReeseHenry.com

Aspen Office:
400 East Main Street Aspen, CO 81611

Carbondale Office:
0326 Hwy. 133, Suite 200 Carbondale, CO 81623

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