Business Identity Theft: The Rising Epidemic No One’s Talking About
Did you know that businesses can be victims of identity theft? During the first five months of 2017, the IRS found over 10,000 instances of business identity theft, an increase of 250% over 2016, when only 4,000 cases were reported for the entire year.
Here are some of the types of scams run by business identity thieves:
- Create fake W-2s and file individual tax returns for refunds
- File fraudulent business returns and collect refunds
- Open a business credit card or line of credit
- Order merchandise or equipment to resell and charge it to the business
- Requests for wire transfers that seem to be from an executive but are actually from crooks
For some of these crimes, all that was needed was the EIN, the name of the business and the official address. Some criminals are even updating the business registration with the Secretary of State to insert their own name and address in place of one of the real officers. Businesses that no longer operate but haven’t completed their dissolution process can also be vulnerable.
To combat fraudulent filing, the IRS will be requiring additional information to file business returns electronically starting with the 2018 filing season. This information includes the name and Social Security number of the person signing the return, dates and amounts of recent tax payments, and filing history of payroll tax returns.
How to prevent business identity theft
- Remove the EIN from your business website
- Shred all documents with sensitive information before disposing in the trash
- Get a business credit report from the credit reporting bureaus at least annually: Dun & Bradstreet, Equifax, Experian, and TransUnion.
- Check the information at the Secretary of State’s website quarterly
- Complete all the processes to fully shut down companies
- Educate your employees about the dangers of phishing emails
- Add multi-factor authentication to your company login process
What should a business do if they’re a victim of identity theft?
- Notify local law enforcement
- Contact the IRS
- Notify banks, credit card companies and all other creditors
- Report the theft to the credit reporting agencies
- Consider a credit freeze
- Correct all incorrect information at the Secretary of State
Are you concerned about business identity theft? Has your company been a victim of identity theft? Call our office today and we’ll help you get back in control!