When an identity thief has purchased your personal information from a data breach, they can use it for all manner of malicious purposes. One common use is tax fraud.

This means a criminal might have purchased your bank account details and tax documents online and then have authenticated access to your bank account. Then the criminal can file a false tax return on your behalf and claim your refund from the IRS. When the IRS deposits money into your bank account, the criminal can transfer the money into an untraceable cryptocurrency wallet. This untraceable cryptocurrency can be used to purchase more stolen personal details, which starts the process all over again, or cashed out into the criminal’s own account.

Unfortunately, the victim of this identity theft often has no idea he or she was targeted until filing the authentic tax return. Fortunately, there are steps you can take to help protect yourself.

File Your Taxes As Soon As Possible

If you have the documents you need to file your tax return, do so now. The more quickly you file your taxes the less time a criminal has to file taxes fraudulently in your name.

Don’t Provide Your Personal Information Without Verification

If you are contacted via phone or email by someone claiming to be from the IRS, be on high alert. Criminal can impersonate the IRS or other organizations in order to get your personally identifiable information. And remember, the IRS has your name and Social Security number. You don’t need to provide it to them over the phone or email. If in doubt, contact the IRS directly.

Monitor Your Personal Data

Credit report and identity theft monitoring are important when it comes to keeping your personal data protected. This essential monitoring can help alert you to one of the first signs of identity theft. Make sure you’re protected.

The post How Cybercriminals Use Stolen Personal Data for Tax Fraud appeared first on IdentityIQ.