The average tax refund in 2012 was $2,913 — and thieves know this. That’s why identity thefts on tax returns are on the rise.
“Within the past year, we have increased the number of prosecutions of people who are perpetrating or instigating identity theft by over 60 percent,” said Eric Smith with the Internal Revenue Service.
Explaining how it works, tax accountant Janice Hayman said, “They will pretend to be you. They’ll have a phony W-2 with fraudulent withholdings. Everything about it is inaccurate, incorrect and it is straight out fraud. They are trying to get a refund that doesn’t exist.”
But there are some ways you can protect yourself. “Don’t give your Social Security number to somebody who doesn’t really need to have it,” Smith said.
And if you’re filing electronically, “make sure you have a firewall on your computer and update that software, so that ID thieves that try to steal your identity online will be at a disadvantage,” he adds.
Another tip: If you’ve got a refund coming, file as soon as you can to give any potential scammer less opportunity to snatch it.