Believe it or not, during tax season more and more children’s social security number is being used on fraudulent tax forms claiming them as independents. Claiming that you have a child as a dependent on your tax return if filed properly, can earn you a nice refund approximately worth $1000. And if they know how to file proper deductions, can be even more.
According to a cybersecurity company Terbium Labs, on the dark web, stolen data including child’s name, social security number, date of birth and mother’s maiden name was making the rounds. For as little as $312.
That’s a very scary prospect. People are willing to file fraudulent tax returns with the hopes of only netting $688. And since very little personal income taxes are highly scrutinized, most of these crimes go unnoticed by the IRS if they mail in their file. The IRS electronic filing system will flag duplicate social security numbers. So if the criminal files his returns first, then you will have a hard time filing your proper tax forms because your child’s social security number will already have been entered into the system.
Do not let this be confused with unintentional identity theft. A lot of times when parents divorce or if parents are in separation, they might accidentally both claim the child as a dependent.
Teenagers are at risk for other fraudulent actions such as procuring small personal loans and credit cards. Most teenagers entering colleges have had a job, been paying taxes and it is a natural thing for them to be applying for loans and credit cards at this point in their life. Therefore, identity theft criminals who pose as teenagers do not have a hard time opening accounts.
So what can you do as a parent to protect your child’s identity?
- Perform a credit check on your child. But this may or may not come with consequences. If your child has no history of credit, by performing a credit check, you will start one. However, you can freeze your child’s credit but it will have to be unfrozen when the child reaches a certain age so they can take our a car loan, etc.
- File your tax returns as early as possible each year to make sure you claim them as dependents first.
- Be selective about where you enter their social security number. Not all places that ask for it are legally entitled to it. If it’s not necessary, then don’t supply it. It’s not worth putting your child at risk for easy record keeping.
- Protect the hard copies. Do you know where your social security card is? Make sure your hard copy is in a safe place.
- Watch out for junk mail. If someone has stolen your child’s identity, the amount of junk mail addressed to your child will surely increase with solicitations. This can be a good early warning tool that your child’s data has been breached.