Identity theft continues to be one of the most disruptive and time-consuming issues taxpayers face—and tax season is when the risk is highest. Fraudsters actively target Social Security numbers, wage data, and tax documents, often exploiting unsecured methods of document sharing.
While most taxpayers understand that identity theft is a serious problem, many don’t realize how easily their information can be exposed through everyday habits that prioritize convenience over security.
From a tax compliance standpoint, safeguarding taxpayer data is not optional—it’s a responsibility. Practitioners are bound by strict confidentiality and data protection standards, and taxpayers should hold themselves and their advisors to the same expectations.
As filing season gets underway, here are several best practices taxpayers and business owners should follow to reduce identity theft risk.
1. Avoid Emailing or Texting Tax Documents Containing Full SSNs
Email and text messaging are not secure transmission methods for sensitive tax information. Documents containing full Social Security numbers, EINs, or detailed wage data should never be sent through unencrypted channels.
Tax professionals should provide one of the following:
- A secure client portal with encrypted uploads
- A secure email delivery system with password protection
If your tax preparer does not offer secure document exchange options, this is a significant risk exposure.
2. Create and Maintain an IRS Online Account
An IRS online account provides taxpayers with direct visibility into their tax profile and can help detect issues early. Through the account, taxpayers can:
- Access wage and income transcripts
- View IRS notices and correspondence
- Check account balances and payment history
- Monitor refund status
Although identity verification can take time, the access and transparency it provides are well worth the effort—particularly for taxpayers with complex filings or prior-year issues.
3. Request an IRS Identity Protection PIN (IP PIN)
An IP PIN is one of the most effective tools available to prevent fraudulent tax filings. Once issued, a valid IP PIN must be entered to file any tax return using that SSN.
Without the correct IP PIN:
- The IRS will reject electronically filed returns
- Fraudulent paper returns are flagged for review
Even legitimate taxpayers cannot file without their assigned PIN, making this an extremely strong safeguard against identity theft.
Final Thoughts
Tax season isn’t just about filing returns accurately—it’s also about protecting the information used to prepare them. A few proactive steps can significantly reduce the risk of identity theft and the administrative burden that follows a fraudulent filing.
Whether you are a taxpayer, business owner, or tax professional, prioritizing data security should be part of your annual tax season checklist.
