Guarding Your Social Security Number

Do you know where your SSN has been?

As though you don't already have plenty to think about, now you have to monitor your financial identity too. You probably already shred sensitive records and documents, and guard your credit cards, but one aspect of protecting your identity you may not have already considered is someone randomly assuming your social security number.

When identity thieves hijack your social security number, they can establish new credit accounts, make purchases, reroute your mail and wreak all kinds of havoc. That's a major hassle to be sure, but it's also possible your social security number can be abused in a more insidious, passive way.

Recently, a number of residents in US border states have discovered that they have a problem with the IRS because of a discrepancy between what they've earned and the wages reported to the Social Security Administration.

Whether you call them undocumented workers or illegal aliens, there is an increasing incidence of "borrowing" someone else's number. The result is a nasty surprise for taxpayers who dutifully file their taxes and are hit later with an audit and penalties for paying less in taxes than they should. The IRS places the burden on the taxpayer to prove that they didn't make the money that is being reported.

The net result is frustration and a bureaucratic runaround while papers are gathered and other "proofs" are lined up to submit to the IRS and Social Security Administration. The costs, both real and intangible, fall squarely on the taxpayer. And because the IRS is a couple years behind in verifying tax filings, it could be several years before you even know there's a problem. They have to validate that you are the proper owner of the number in question and you must prove that you are an innocent bystander.

To avoid issues down the line, check your Social Security statement, which is mailed out annually every spring. Your income numbers should match on your SS statement and your tax return. If there is a discrepancy, contact the IRS at 1-800-829-1040 and take it directly to them. They will flag your account and work with you to resolve the mismatch. Also, contact the Social Security Administration at 1-877-IDTHEFT (1-877-438-4338).

The following points may help you protect your social security number:

Resources

Books

Preventing Identity Theft for Dummies —This covers all the major points and like most books in the Dummies series it's an easy, quick read.


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