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Tax Day Tips

Tax season can be a stressful time, causing many people to shortcut their typical processes that ensure information security. Because tax documents contain the most sensitive personal information including name, address and social security number, they are an easy target for identity thieves when not managed properly. In 2011, IRS department officials identified more than a quarter of a million identity theft attempts.

The following tax tips are designed to help consumers protect their personal information during tax season and throughout the year:

  1. Create a retention schedule. Maintain compliance with IRS regulations by adhering to its recommended retention schedule. Items including bank statements, insurance policies, payroll records, sales records, accident reports and canceled checks should be retained for a minimum amount of time. The IRS suggests permanently retaining audit reports, tax returns and year-end financial statements.

  2. Organize and store documents in a secure place. To avoid the risk of identity theft, keep sensitive documents in a safe location; this includes both paper and electronic documents. Create a file for organizing paper items relevant to taxes, including receipts and bank statements, and store the folder in a secure location, ideally a fire-proof, locked safe. Similarly, dedicate a folder on your personal computer for storing tax information and password protect sensitive information. Regularly back up encrypted data with an external hard drive to minimize loss if your computer hard drive crashes.

  3. File safely Create copies of tax documents and keep proof of delivery. The IRS has no statute of limitations on returns not filed, so a receipt will serve as proof. If mailing tax returns, use a secure mailbox and tracking method, such as certified mail, which provides confirmation of mailing and delivery. When filing electronically, ensure the website provides Secure Sockets Layer (SSL) encryption by checking for a padlock icon, which is typically located to the right of the address bar. Remember to print out the confirmation that your return was accepted.

  4. Be cautious of scams. Be wary of emails requesting personal information. The IRS will not initiate contact with taxpayers to request personal information via email or social media. Emails claiming to be the IRS or requesting sensitive information should be forwarded immediately to phishing@irs.gov.

  5. Securely shred documents no longer needed. After the established retention period, securely shred sensitive documents unless required by law or injunction. Many home shredders do not sufficiently protect individuals from identity theft as skilled identity thieves can reconstruct your documents using software. Instead, have your documents destroyed by a professional organization that offers secure shredding services. Certain secure destruction companies provide shredding service to residential areas and community shred events. Visit http://www.cintas.com/shreddays to locate shred events near your community and take advantage of free shredding services. Similarly, Office Max locations offer secure shredding services for its customers. Select a provider that is AAA-NAID certified, which ensures the company complies with the most stringent operational security procedures in the industry.

It is important to practice safety and security while completing taxes. By consulting tax professionals and following these tax tips, consumers help ensure compliance with the IRS while taking precautions to avoid identity theft.