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Protecting your personal information after a data breach

On Behalf of | Sep 30, 2016 | IRS Issues

While it wasn’t the first and certainly won’t be the last, the data breach at Yahoo is certainly the largest to date. In September the company revealed that at least 500 million accounts had been hacked, with thieves stealing names, personal information and passwords. In a released statement, the company accused a “state-sponsored actor” of perpetuating the crime.

Even if you do not hold an account with Yahoo, there is a high probability that some company or institution that has your personal information has been the target of a hacker acting independently or at the behest of a foreign government. Initially receiving much focus from news outlets, data breaches are no longer given top billing in the media due to the frequency with which they seem occur. Once novel, reports of data breaches have increased drastically as hackers evolve in their ability to devise sophisticated infiltration programs.

An obvious solution to this problem would be to avoid conducting business on the internet. Even following this precaution, however, individuals are still at risk of having their personal information stolen and sold on the black market. If you file your taxes with the IRS, have medical insurance with Anthem or make purchases at Target or Home Depot, there is a high probability that an account of yours has been accessed without your permission. Such data is valuable to those seeking to enrich themselves by filing false tax returns or obtaining credit cards in your name.

While tax season is months away, should such an event happen to you in the near future, these are the steps that the IRS suggests you take to protect the integrity of your personal information:

1. Determine which personal information has been released in the data breach.

When JPMorgan Chase had accounts hacked in 2014, thieves stole names, phone numbers, addresses and email addresses of Chase clients. The hackers were unable to access banking passwords or social security numbers, which limited the type of accounts hackers would be able to establish. According to the IRS, tax accounts are most at risk if social security numbers and wage information is revealed.

2. Discover how the company is helping those impacted.

In many cases, credit monitoring services are provided to the victims.

3. Monitor your credit report.

You are entitled to receive a free credit report from the three credit reporting agencies on an annual basis. Consider checking your credit immediately after the data breach and then later in the year. Experian, TransUnion or Equifax will also put a credit freeze on your account, which will bar access to your accounts.

In order to prevent your stolen information from being used to file a tax return, it is highly recommended that you file your return at the beginning of tax season to prevent a fraudulent filing from being accepted first.