We all know that tax fraud and identity theft are big time issues these days. So it must make thieves smile when they know that W-2s, 1099s, and all sorts of juicy identity laden information is being circulated through the massive insecure United States Postal Service system. While I’ve never had this happen to me, in my ten-plus years of getting paper forms, I’m sure it’s happened to people before and it’s almost only a matter of time before it happens to me.
So, we’re going to discuss two pre-emptive measures and then reactive ones, in case your information is stolen.
Here are the two preemptive measures:
Opt for Electronic Statements
Whenever possible, opt to get electronic copies of your statements. It can be a hassle to print them out (you don’t really need the paper copy at all, I just find it’s easier to handle my taxes when I have the paper organized in front of me) but this skips mail entirely. You can’t lose in the mail what never went through it.
If you can’t opt for electronic statements, then you’re really at the mercy of the postal service unless you want to get a PO Box. This would require you to change your address on all those accounts to your PO Box, which might cause hassles in other areas. Going to a PO Box only removes the risk that someone steals mail directly from your mailbox, which wouldn’t be an issue for us because ours is locked.
Now, what to do if your W-2, 1099, or other tax document is stolen or opened:
You have to assume that the person who stole or opened your document is going to do something nefarious with it. Or they’re nosy and want to know how much you make. Either way, you need to assume the worst and put fraud alerts with each of the credit bureaus so they are aware. A fraud alert will add extra checks to the process of pulling your credit so that you are made aware when it happens. If someone applies for a credit card, the issuer will pull your credit and you’ll be notified.
- Equifax  or call 800-525-6285
- TransUnion  or call 800-680-7289
- Experian  or call 888-397-3742
Another way that people can scam you is by filing your tax return and getting the tax refund  themselves. With a W-2, they have everything they need to file your return and they’ll just enter their information in the direct deposit section. The return will likely be wrong, unless you only ever get a W-2 and no other forms, so let the IRS know that your W-2 was compromised.
Then, if you can, file your tax return as soon as possible. As much as we’d like to think that telling the IRS is enough, it’s so big of an organization that the only protection you have against this type of fraud is to beat the thief in a race.
Be Informed about Social Security
Lastly, the biggest piece of information on the W-2 or 1099 is your Social Security Number. While I hope it never comes down to this, you have options to change the number. Review the Social Security Administration’s information page  on ID theft (and what to do if you think someone is using your number) to see what your options are.
Hopefully this never happens to you but if it does, these are the steps you need to take.
(Photo: 401k )