Many of our blog posts discuss tax fraud and identity theft in relation to individuals. It is important to recognize the significance and frequency of tax ID theft that can happen with businesses as well.
Jennifer Primrose and Amanda Ward, in an article published in the Journal of Accountancy, list warning signs of identity theft, actions to be taken if fraud occurs, and preventative measures that businesses can take to avoid fraud.
Warning signs can include notices from the IRS regarding an already filed return or unknown employees, and recent activity on closed accounts or transcripts.
If you suspect business tax fraud, it is important to respond to the IRS notices right away. In addition, report the fraud to the police as well as the Federal Trade Commission. Any accounts with fraudulent activity should be closed.
Some of the preventative measures a business can take include:
- Protecting Social Security numbers – only give out numbers if needed, truncate whenever possible, and keep the numbers in a safe place,
- Using safety precautions in the workplace such as, shredding documents with private information, using anti-virus software on computers, and changing your passwords frequently,
- Monitoring your credit report periodically.
While the IRS continues its efforts to combat tax fraud, technological advancements make it easier for hackers to access businesses and individuals information. To read the full referenced article, please click here. For more information on business tax fraud and protecting your business, contact Brian McFarren at (231) 726-5815 or bmcfarren@brickleydelong.com.
Learn more about our business taxation services here.