Identity Theft: 9 Ways to Predict Tax-Related Fraud

Posted  April 08, 2016  by  Shred-it

Identity theft taxes

Tax time is a busy time for individuals, businesses, accountants – and identity thieves.

In fact, tax refund fraud has been called the largest and fastest growing identity theft category by the Federal Trade Commission (FTC).

While information thieves take advantage of the season’s filing deadlines and hectic schedules, the following information security issues may increase the risk of tax-related fraud too.

Visible Information

As employees prepare tax filing information, various documents are pulled together and often, digital information is printed out. A Clean Desk Policy will help keep work areas – desks and computer screens – clear of this confidential information.

Unattended Printers

Leaving tax-related documents at printer stations increases the risk of a data breach. Implementing a process where employees have assigned security codes for printer access helps reduce the risk.    

Phishing Scams

Personal data scams have increased over 400% in 2016, according to a USA Today article. Criminals actually need very little to file identity theft taxes and fake returns (such as name and address, Social Security number, employer identification number), and they often use phishing scams to gather this information. On-going training should address how to spot fraudsters who impersonate government agencies such as the IRS or banks in emails.


How long to keep old taxes? Back-up tax return information, for example, must be kept for up to seven years. What’s important is that all workplaces have a comprehensive retention schedule that is based on requirements of privacy laws and legislation.

Mobile Devices

Preparing for tax season often means taking work home. Mobile devices make this possible (by 2020, almost 75% of the workforce will be mobile) but data breach risk increases when confidential information is removed from the office. Enforce a comprehensive Mobile Device Policy, and equip all mobile devices with firewalls, anti-virus, encryption software, and other safeguards.  

Storage Policies

All tax information stored on hard drives (personal computers as well as printers, copiers, etc.) should be safeguarded with access controls. All documents should be physically protected too, in a secure, locked location.  


Protect information that is stored digitally with strong passwords. Change passwords frequently, especially around tax-time. Keep in mind that 28% of data breaches are the result of weak passwords and remote access security, according to the 2015 Trustwave Global Security Report.  

Stolen Documents

Dumpster divers and other criminals steal tax-related information out of open recycling and garbage bins. Replace these containers with locked consoles that safely store documents that are no longer needed. Also, be on the lookout for tax-related forms and documents that should arrive in the mail. Missing forms could indicate that an identity thief has gone through the mail.

Disposal Practices

Research has shown only about one-fifth of accumulated tax-related documents are securely destroyed after taxes are filed. In the workplace, a document shredding partner will provide secure on- or off-site shredding using cross-cut technology. A Shred-it-all Policy means all documents will be securely destroyed when they are no longer needed. Hard drives and e-waste should be securely shredded too.

Minimize chances of falling victim to tax-related fraud with these tax season security checklists.

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