The IRS needs your Social Security number. In fact, it’s probably more important than your name. The IRS keys just about everything to it, including all those critical little Forms 1099 you have to keep track of each year at tax time.
There’s 1099-INT for interest, 1099-DIV for dividends, 1099-G for tax refunds, 1099-R for pensions and 1099-MISC for all sorts of miscellaneous income. All are keyed to your Social Security number. That would make it doubly upsetting to find that the IRS had disclosed it to others.
The IRS warns you about how to protect yourself: Top Tips Every Taxpayer Should Know about Identity Theft. The IRS also has this Taxpayer Guide to Identity Theft. But mistakes happen, and an audit by Public.Resource.org suggests the IRS may have mistakenly posted “tens of thousands” of Social Security numbers on the Internet.
As reported in the National Journal, the identifying numbers were not exposed for long. This isn't exactly Edward Snowden-worthy either. Yet some coverage of the story reported big numbers–IRS dumps up to 100,000 Social Security numbers on the Internet. It makes you wonder who saw them and mined the data. The data-breach concerned nonprofit political groups known as 527 organizations.
When the IRS told Public.Resource.org’s founder, Carl Malamud, to disregard Forms 990-T included in the agency’s January release, he discovered that it revealed Social Security numbers. Malamud wrote the IRS pointing out instances where a Social Security number was accidentally revealed.
Of over 3,000 tax returns contained in the January update, 319 contained sensitive data the agency should have scrubbed, Malamud wrote in the July 1 report filed with the inspector general’s office. He claims about 2,319 Social Security numbers—perhaps more—were revealed. Public.Resource.org called the IRS’s efforts at data security “unprofessional and amateur,” and requested the IRS shut down the 527 database.
Congressman Tom Latham (R-Iowa) has authored a letter to acting IRS Commissioner Daniel Werfel seeking explanation for the unauthorized public disclosure of as many as 100,000 Social Security numbers, and the agency’s procedures for handling such data.
The IRS suggest care with this key number. Show your Social Security card to your employer when you start a job, the IRS says. Also show it to your financial institution for tax reporting purposes.
But in general, the IRS says you shouldn't carry your Social Security card with you. For that matter, don’t carry other documents that display your number either. If your Social Security number is stolen, the IRS warns that someone else may use it to get a job. The unwitting employer may report the income to the IRS under your purloined Social Security number.
 | Caution: Identity theft is a serious threat in today's world, and it is important to take every precaution to avoid it. After it is no longer necessary to retain your tax records, financial statements, or any other documents with your personal information, you must dispose of these records by shredding them and not disposing of them by merely throwing them away in the trash. |
The IRS will assume when it sees that income reported to your number that you failed to report all your income on your tax return. Trouble will ensue. If you end up in this pickle, you can explain the fraud to the IRS and get your record updated. But you don’t want to go through this if you can help it, and you definitely don't want to go through it alone. Be careful out there.
Article originally published on Forbes by Robert W. Wood
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