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Tax Scams - Consumer Alert!

January 12, 2015

As we begin what promises to be a very busy tax season one of the issues we are hearing more of from our clients is the deliberate attempt by unscrupulous parties to obtain tax information and/or money from them. Usually this contact has been in the form of aggressive phone calls or emails by persons claiming they are an "agent" from the IRS. The agent then goes on to say that the taxpayer owes back taxes and must provide more information or even immediate payment to resolve the issue.

Although the "agent" will sound very convincing, taxpayers need to understand that the IRS does not operate this way and that there are key indicators that this is in fact a scam. Read more about this issue at the IRS website at: http://www.irs.gov/uac/Tax-Scams-Consumer-Alerts

Be aware, and don't be a victim!

Here are five tips to help protect yourself and your financial assets from fraud:

1. Complex Passwords - For all of your online financial accounts, whether they are credit cards, bank accounts or investment accounts, protect them with complex passwords. Make sure your passwords are at least eight characters long; utilize upper and lower case letters; and include alpha, numeric and symbol characters. Having a complex password will make it much more difficult for someone to hack into your account.

2. Notifications - Turn on notification options to track every transaction on all of your financial accounts. By receiving an email or text alert each time there is activity on your credit card or a transaction hits your bank account, you can be proactive and vigilant about catching suspicious activity and reporting it immediately should it occur.

3. Credit Monitoring - Subscribe to a credit monitoring service like Life Lock. This allows you to know when someone applies for credit in your name or with your social security number. There is a cost to services like this, but compared to the damage that can be done to your financial health if a loan or credit card is issued to an identity thief in your name, the cost is pretty inconsequential.

4. Daily Review - Review your online accounts on a regular basis. I suggest looking at your accounts daily. By logging in to your financial accounts and reviewing them frequently for suspicious activity, you will help to nip fraudulent activity in the bud.

5. Shred - If you don't have a shredder, get one. Don't throw all your discarded mail in the trash...shred it. Your mail (especially junk mail) contains a wealth of personal information, so don't make it easy for someone with ill intentions to get their hands on it.

We are sure you'll agree that the prospect of having someone perpetrate identity theft or tax fraud against you is definitely unsettling. However, as tax professionals, it is our responsibility (and a great opportunity) to help our clients face the fact that this risk is the reality of our times and of the online and connected world in which we live. Our world is not going to change, but we can help our clients adapt their habits to better protect themselves and their financial health.

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