Millions of Americans expect to get refunds in the coming weeks. But the IRS recently reported that a big rising problem in taxes is identity theft of tax refunds. How can you protect yourself?
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the problem of tax identity theft. He notes that the IRS claims to have stopped 14.6 million suspicious returns from being filed, potentially saving taxpayers $50 billion between 2011 and late 2013. But still, $3.6 billion in fraud occurred in 2011. Dan looks at new IRS initiatives to protect taxpayers, including the identity-protection PIN trial program in Florida, Georgia, and the District of Columbia. In the end, though, Dan concludes that your best defense is protecting your Social Security number and other personal information to prevent fraud.