UNITED STATES / AGILITYPR.NEWS / October 15, 2024 / In August, a data breach in the National Public Data exposed about 272 million Social Security and Tax ID numbers. With this highly-sensitive information now on the dark web, a great deal of harm can happen – including the filing of fraudulent returns.
Imagine a client files their tax return only to find out that somebody else beat them to it and filed the return on their behalf – and intercepted a falsified tax refund. If this happens, it can take years for the IRS to investigate and unravel the situation.
There are other issues as well. A client’s Social Security number could be used by someone seeking a credit card, mortgage, bank loan, employment under their name or the victim’s name.
Now imagine if the client’s child were eight years old and someone gained access to their Social Security number. There could be years of trouble before the client catches it.
Fraudsters can also use a client’s Social Security number to claim government benefits like Social Security benefits.
To make it worse, when you get upside down with the IRS, the issues can compound on each other and keep getting more and more complicated.
So what’s the answer? Monitoring IRS accounts to help prevent these kinds of fraud.
Enter TaxStatus, a fintech product that integrates with the IRS so that a financial advisor has direct access to the client’s tax records. The advisor can then do continuous monitoring to look for planning opportunities and help prevent tax fraud by knowing what’s happening at every stage with their clients’ IRS accounts. This active monitoring allows advisors to catch any suspicious activity on the client’s IRS account and to stop that activity before serious damage occurs. In addition, so many more planning opportunities are visible to the advisor – all without bothering the client to bring in paper copies of their tax returns.
Financial advisors should be very interested in learning how they can protect and prevent tax fraud while also generating more planning opportunities for their clients. And NOW is the time for them to become more vigilant than ever. The fraudsters are hard at work and advisors can serve as heroic front-end guards.
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