ID Thieves Don’t Discriminate, Health Professionals Are At Risk

ID Theft and Refund Fraud - Dental CPA

Health professionals are at risk of identification theft and refund fraud. This compilation of resources offered in this Rea & Associates resource will help you through the next steps to reclaiming your identity if you have been targeted.

What has become abundantly clear over the last several years is that it doesn’t matter who you are, where you live or how you make a living – identity thieves do not discriminate. While tax refund fraud has been around since 2008, the size and scope of the scam has ballooned since then. Fast forward to 2013, and we find that the rapid escalation of this particular scam claimed a jaw-dropping $5.2 billion, according to the United States Government Accountability Office.

Locally, business owners continue to steadily report instances of identity theft and tax refund fraud to local law enforcement as well as to their financial advisors. From our perspective, we continue to see more instances of refund fraud than in previous years, particularly among healthcare professionals, which is a trend that is only expected to get worse.

Read: How To Recover From Identity Theft & Refund Fraud

Is It Too Late For You?

You probably won’t even know that you’ve been a victim of tax refund fraud until it’s too late. Some taxpayers will learn about the breach after receiving a letter from the IRS or from their state’s taxation department. It’s also likely that your accountant will be the first one to make the discovery when they try to file your tax return and receive a notification that the name and Social Security Number of their client – you – has already been used.

Here’s where it gets tricky.

Once it’s been discovered that you have been victimized, the burden is on you to prove your identity to the IRS to obtain the tax refund that is rightfully yours. The good news is that once you are able to prove that you are who you say you are, the IRS will happily release your money. But the bad news is that the entire process can take a lot of time and can be confusing to navigate.

Rea & Associates recently released a compilation of documents and resources from a variety of sources to help victims recover from Identity Theft & Refund Fraud, which can be an overwhelming task in itself. The steps victims must complete include:

  • Filing a report with the local police
  • Filing a complaint with the Federal Trade Commission
  • Contact one of the three major credit bureaus to place a “fraud alert on your credit records.
  • Respond immediately to any IRS notice by calling the number provided
  • Complete the Identity Theft Affidavit

You don’t have to go through it alone. Your financial advisor can help you through the steps and can communicate with the IRS on your behalf. Your advisor can also determine the validity of documents and phone calls if you have further concerns.

IRS Calling? Don’t Buy It

In addition to stealing your federal and state tax returns, some scammers are going the extra mile to harass their victims to pay “back taxes” that they don’t actually owe. It’s important to remember that the IRS will never contact you by phone or in person. The first correspondence you will have with the IRS will always be in the form of a letter – not a phone call. Last year, more than 1,000 taxpayers collectively lost about $5 million after scammers called to demand payment to settle their debt with the IRS. Failure to pay, the scammers warned, would result in jail time and driver’s license revocation.

For additional guidance, click here to read How to Recover from Identity Theft & Refund Fraud: A Compilation of Documents and Resources and get access to valuable information about what you should watch out for and how you can recover. For more information or for help claiming your tax return, email the Bright Dental CPAs at Rea & Associates.

By Alan Hill, CPA (Mentor office)


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Small Steps You Can Take to Make a Big Difference in Your Practice’s Financial Health

An interest in teeth is necessary to becoming a dentist, but did you know that an interest in business is important, too? All too often, dentists start their own practices without recognizing that they’re actually starting their own businesses. Now they have to wear two hats: compassionate health care provider and shrewd business owner.

internal controls DentistsAs a dental practice owner, you’d like to believe the best of your employees…that they’re dedicated and upright and would never even consider stealing from you. Hopefully this is the case if your practice, but taken as a whole, fraud in small businesses, including dental practices, is surprisingly high. In fact, the Association of Certified Fraud Examiners (ACFE) estimates that the typical organization loses 5 percent of its revenues to fraud each year.

As do teeth, businesses need preventative care to stop problems from developing. One important kind of preventative measure: internal controls – the processes and systems that protect your practice from employee fraud.

Internal Controls Best Practices

Follow these internal controls best practices to decrease your risk of fraud and keep your practice healthy and profitable:

  • Conduct a risk assessment to identify areas where fraud may occur.
  • Set a tone that your practice takes ethics serious.
  • Segregate duties to ensure that no one employee is responsible for all steps of the accounts payable or receivable process.
  • Train employees on the proper use of practice resources and how to report misuse of resources.

Dental Internal Controls Help

Want to get started on fraud prevention in your practice, but don’t know where to start? Contact Rea & Associates. Our Bright Dental CPAs will perform an internal control review or conduct a fraud assessment. We’ll help you create the policies and procedures you need to keep your practice healthy.

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