The April 15 tax deadline is fast approaching, and with that comes the perfect time for identity thieves to steal your information and your tax return. You can take steps to protect yourself, but the best and first thing you should do is shift your philosophy in how you safeguard your information.
For the 14th year in a row, identity theft is the top consumer complaint received by the Federal Trade Commission. Of those complaints, tax-related thefts are the most common 30 percent of identity theft complaints in 2013 were tax- and wage-related. In fact, tax refund theft is the fastest-growing form of identity theft, up 468 percent from 2011 to 2013.
Thieves commit tax refund fraud by pretending to be you. Identity thieves often file your return and receive your refund before you have even organized your W-2s or started your 1040. All they need to file using your identity is "the trifecta": your full name, birth date and Social Security number. And they don't need sophisticated hacking schemes to get that information.
So ask yourself some questions: Do your Facebook friends really need to know how old you are? Some of the best identity thieves in the world aren't old enough to vote or buy alcohol in the United States. Do your W2's still come to your unlocked mailbox? That's like storing your engagement ring on your driveway. The IRS will never email you if they discover your identity has been stolen, so any text messages, emails, or social media messages claiming to be the IRS are likely a scam.
If you are a victim, you will eventually receive your tax return once you submit proof that you actually are you, but the process of proving your identity to the IRS requires time, energy and patience. At best, your return will be delayed. The IRS states a typical case takes about 180 days to resolve a six-month period in which you do not have access to your refund.
Although you may not be personally liable for these losses, our country certainly is. Because the government recovers very little of these tax "refunds" sent to criminals, we all lose. In 2012, the United States lost a whopping $5 billion in fraudulent tax returns due to tax identity theft.
Solving tax refund theft goes beyond technical fixes and third-party solutions. Plans to increase workers and safety measures at the IRS will help, but recognizing the "street value" of our personal information is key to protecting ourselves from the risks of identity theft.
Most people know to guard their Social Security numbers, but people must learn to value other personally identifiable information, or PII, the same way they do with other assets of value. This is information as simple as your name, email, mailing address, driver's license number and place of birth. People need to protect this personal information the same way they do their cars, houses and money.
In an increasingly digital world, personal information is collected, stored and shared in ways previously unforeseen. In order to protect our PII, we need to understand how our different pieces of information are related and how identity thieves value each piece.
The Center for Identity at the University of Texas at Austin is developing the Identity Ecosystem Model to understand which PII is at highest risk of exposure and how to value our identity information as a set of interconnected assets. As taxpayers, we need to be better armed to know how to protect our personal information and that starts with understanding its value.
As taxpayers and owners of personal information shift their thinking to value PII as they value traditional assets, business practices, laws and technology must adapt. This starts with protecting information and punishing the theft of personal information as if it were real money.
Our personal information is worth real money and the loss of our citizens' personal information is worth billions of dollars to the U.S. government. It's time for taxpayers and our government to take action. Together, this is a crime we can combat.
Suzanne Barber is the director of the Center for Identity and a professor of electrical and computer engineering at The University of Texas at Austin. She is a cybersecurity expert and has worked with numerous industrial, government and academic institutions to combat current, emerging and future identity management threats and fraud.