It’s no one’s favourite time of year again, tax season! Unfortunately, not only are you consumed with the task of collecting all your financial records and filing them or sending them to your local accountant, you need to ensure you are keeping all that sensitive information safe! Talk about overwhelming.
As you can imagine, identity thieves know no bounds, that includes targeting your tax return. Tax-return identity theft occurs when someone steals and uses your Social Insurance Number (SIN) to file a tax return claiming a fraudulent refund.
How do they do it? The identity thief will file a fraudulent tax return early in tax season (before you’re likely to even start thinking about filing) and pocket the refund.
FIVE STEPS you can take to protect yourself from tax-return identity theft:
1. The privacy of your own home has its benefits
SINs are used by tax authorities to identify tax payers. Consequently, tax-return fraud almost always involves a stolen SIN. Keeping your Social Security card at home in a safe place is one way to prevent your SIN from falling into the wrong hands. That being said, only provide others with your SIN when absolutely necessary. Don’t give it out just because some business asks for it.
2. “Let’s go phishing,” says The Scammer. “No, not for trout. Sensitive information!”
Canada Revenue Agency (CRA) scams come in all shapes and sizes – phone, email, text, and mail. In all cases, the sender is posing as an agent from the CRA in an attempt to gather personal information or intimidate someone into providing financial payment. Keep in mind, it isn’t beneath them to pose as your bank. Always be suspicious of this kind of communication. Remember, the CRA already has your information, why would they ask for it again? Not to mention, if you owe the big bucks, you will be kindly informed via letter, not a phone call.
3. Shred it!
To beat the thief, you need to think like a thief. Your tax documents, receipts, bank statements, etc., are all hidden gems that identity thieves are always mining for. When found, it allows these strangers into your personal life. Avoid unwanted guests by safely shredding financial documents.
Pro Tip: Wondering about early disposal of your tax documents before the 7-year rule? Legally, get written permission by the CRA or apply in writing to your tax services office to request early destruction.
4. Protect your snail mail
Taking mail from an easily accessed and overstuffed mailbox is child’s play for an identity thief. Think about investing in a locking mailbox to prevent someone from checking to see what mail you’ve received. Since many contain private information, you should start considering ways you can protect your unguarded mail.
5. Hulk-like passwords
We’ve lectured you on this before, but passwords are our online gatekeepers. If you don’t maintain their strength, thieves can get in! Now, you don’t have to be tech-savvy in order to protect your accounts from hackers. Start by choosing strong, unique passwords for each financial site you use. Can’t keep track? Try a password manager app.