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"Reading time: 2 minutes\r\n\r\nThe risk of tax identity theft for individuals is widely known, but a new concern is businesses becoming targets. Identity thieves are smarter than in the past: they often know filing practices, the tax codes, and the best ways to get valuable data.\r\n\r\nHow it works\r\n\r\nIndividual Tax identity theft usually consists of using a taxpayer’s identifying information (such as Social Security number) being used to commit crimes, like obtaining a refund fraudulently.  Business tax identity theft is similar. A business’s identifying information is used to obtain tax benefits or enable individual tax identity theft schemes.\r\n\r\nFor example:\r\n\r\nAn identity thief could use an Employer Identification Number (EIN) to file a fraudulent tax return and claim a refund.\r\n\r\nAnother method might be a fraudster fabricating employees and reporting income and withholding on false W-2 forms. Then, he or she can file fraudulent individual tax returns for the said “employees” and claim their refunds.\r\n\r\nDamage to your reputation can be one of the most severe consequences for victims of business identity theft. Affected business will also likely incur a significant loss of time and money trying to sort out the theft.\r\n\r\nWarning signs\r\n\r\nSeveral warning signs might clue you in on possible identity theft. A few examples include:\r\n\r\nYour business does not receive expected or routine mailings from the IRS\r\nYou receive an IRS notice that :\r\ndoes not relate to anything your business has submitted\r\nconcerns fake employees\r\nis related to a defunct, closed, or dormant business after all account balances have been paid\r\nThe IRS rejects an e-filed return, or an extension-to-file request, saying it has already received a return with that identification number - or the IRS accepts your submission as an amended return  \r\nYou receive a letter from the IRS stating that multiple tax returns have been filed in your business’s name\r\nYou receive a notice from the IRS stating that you have a balance due when you have not yet filed a return.\r\nThese situations do not always mean you are a victim of theft. They could be the result of a simple error. Still, you should contact the IRS immediately if you receive anything from the agency that might indicate fraudulent use of your Employer Identification Number.\r\n\r\nPrevention\r\n\r\nThe best tactic for dealing with identity theft is to prevent it from happening. The following steps will help to protect a business and its employees:\r\n\r\nProvide training to accounting, human resources, and other employees about the latest tax fraud schemes and how to spot phishing emails\r\nUse secure methods to send W-2 forms to employees\r\nImplement risk management strategies designed to flag suspicious communications\r\nContact us\r\n\r\nThere are many forms of identity theft to be aware of beyond tax identity theft, so it is important to have a comprehensive plan in place to protect your employees and business. If you have concerns about your business being victim to theft, or if you would like to discuss prevention Contact us at 818-334-8623 or click here, and we will contact you.\r\n\r\n© 2018"
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