HR Key Defender of Tax ID Theft

By Roy Maurer Jan 28, 2015

Tax season is underway and HR professionals can play a key role in identifying and deterring tax identity theft, the most common form of identity theft reported to the Federal Trade Commission (FTC) in 2014.

Tax-related identity theft typically happens when criminals file fraudulent tax returns using other people’s Social Security numbers in order to receive refunds.

This is the fifth consecutive year in which tax-related ID theft topped the list of identity theft complaints, accounting for nearly one-third of all identity theft complaints to the FTC.

The agency, along with the Department of Veterans Affairs, the Internal Revenue Service (IRS), the AARP and others, is holding a series of events Jan. 26-30, 2105, as part of Tax Identity Theft Awareness Week. “It’s a good time for HR offices to review their battle plans,” said Lesley Fair, a senior attorney at the FTC.

The agency received 109,063 complaints about tax identity theft in 2014, or 32.8 percent of the 332,646 overall complaints about ID theft.

Here are some tips from the FTC to prevent this scourge:

  • Secure office documents containing workers’ Social Security numbers and W-2 information. “Easy access to Social Security numbers greases the wheels for tax ID thieves, so any piece of paper bearing those digits should be under lock and key,” Fair said. Encourage clean desktops during breaks and after hours and securely dispose of documents that contain confidential data, she added.
  • Limit access to sensitive information. “Not every employee should have carte blanche access to every document in your files and on your network. Use secure office space and password protections to control access,” she said.
  • Consider insider threats. “Sometimes tax ID theft is an inside job. There have been reported cases of con artists worming their way into companies for the primary purpose of stealing sensitive data. If your gut tells you there could be an in-house issue, discuss it with higher-ups at your company,” Fair said.
  • Educate employees on strategies to reduce the risk of ID theft. “Providing free ID theft prevention resources is one of the benefits people appreciate from their HR team,” she said.

She offered these ideas:

  • Order free ID theft prevention brochures available in various languages and distribute them to new employees as a reminder when they’re filling out forms as part of orientation.
  • Educate employees about the warning signs of tax ID theft, such as receiving a notification from the IRS that a return has already been filed under the employee’s Social Security number.
  • Remind employees that the best way to foil tax ID thieves is to file returns early. “Do your bit by getting employees the documents they need by the IRS’s January 31 deadline,” she said.
  • Serve as a resource if employees have been victimized. “Chances are you’ll be the first person at your company to spot the signs of tax ID theft. Maybe it’s a staff member who comes in with questions because their return hasn’t been accepted or a notice your company gets from the IRS listing a purported employee you don’t recognize.”

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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