15760 Ventura Blvd, Suite 610 Encino, CA 91436
15760 Ventura Blvd, Suite 610 Encino, CA 91436
Personal, Affordable Payroll Services, Bookkeeping, and Tax Processing for Small Business throughout Los Angeles County.

Employer Responsibility in Identity Theft and Taxes

Identity thieves are everywhere, threatening to compromise your personal security. What some employers fail to appreciate is their own responsibility for safeguarding their employees from these attacks. Employees run the risk of having their sensitive information exposed — information such as social security numbers, addresses, date of birth and more.

How does this sensitive information leak? As most of us are familiar with, sometime during January, employees receive their annual W2’s, 1099s and K-1s. Such documents contain the type of information listed above that can easily compromise someone’s identity.

Many would-be thieves ultimately realize that any mail marked as an “important tax document” contains information to help steal your identity. Well aware of the fact that these documents are set to arrive prior to the January 31st deadline, these criminals pilfer mailboxes and soon file a fraudulent tax return in order to claim the refund.

When victims of stolen identity inevitably do file their taxes, they are greeted with a mountain of tedious paperwork during the process of reclaiming. Proving your identity is a dense process that typically involves many formalities. Any individual correcting a fraudulent return should expect to dedicate several weeks personal time, a process involving many different moving pieces.

With growing concerns over stolen identities growing daily, many are looking for real solutions. One recent ruling outlined by the US Department of the Treasury is designed to bolster protection measures. Truncated Taxpayer Identification Numbers, known better to some as SSN Masking, is now permitted throughout all recipient tax return copies.

Truncated Taxpayer Identification Numbers, used on documents like 1099-MISC and W-2 forms, place an “X” over the first portion of the recipient’s society security number; alternatively, this “mask” can be placed over the employer identification number. This security measure prevents thrifty crooks from stealing the information directly, giving employees all the necessary peace of mind.

As it so happens, the IRS attempted truncation methods several years ago — permitting businesses and other issuers to utilize them at will. In most instances, the steep learning curve associated with these added measures prevented them from being used altogether. It’s a worthwhile investment, however; it prevents employers from being held liable from damages their employers might experience as a result of fraud.

It’s one thing to have the option of additional security; it’s an entirely different issue understanding how to properly utilize it. Business owners can save themselves time and liability by working with Accounting Taxes Payroll Solutions (ATPP), ensuring sensitive tax information is entrusted to an experienced payroll partner. If you want to help better protect your employees from identity theft, contact us by calling 818-436-2775 or visit our site to learn more about our services.