- What is Tax Identity Theft?
- Identity Theft Protection Checklist
- Warning Signs of Tax Identity Theft
- Identity Theft Victim Resolution
- Contact a Tax Professional
What is Tax Identity Theft?Tax identity theft occurs when someone uses your Social Security number to file a fraudulent tax return and collects your tax refund. In order to do so, the identity thief must obtain a stolen Social Security number and find correlating information, such as a name, address, and more. Once they gather the necessary information, they use it to fraudulently submit a tax return on the taxpayers behalf, and then collect the refund themself.
What does Tax Identity Theft do?Tax identity theft doesn’t only cause you to miss out on a tax return. It can create all types of conflict between you and the IRS. Identity thieves don’t take the care and caution that you might when completing your taxes. That can leave you susceptible to all sorts of fraudulent tax information that may cause problems down the line. Unfortunately, even if you were not the one who completed your taxes, you can still be heels responsible. Additionally, IRS identity theft can open the door to a slough of problems. Once an identity thief has your social security number, they essentially have a key to all of your most personal assets. They can open fraudulent bank accounts and lines of credit, racking up charges and expenses before you even become aware of the data breach.
Identity Theft Protection ChecklistWhen it comes to protecting yourself from fraud, it’s important to understand the IRS identity theft process. Scammers will try to obtain your personal information through fake charities, bogus emails, and various forms of online hacking. Without your Social Security number, address, phone number, and other personal information, a scammer won’t get very far. Here are some measures you can take to prevent leaking any of this vital information to the wrong people.
Be Wary of ScamsThe easiest and most common way for identity thieves to scam people is to obtain information through a con. Scam phone calls and phishing campaigns are some of the most common ways identity thieves go about their business. The IRS will never reach out to you via phone or email, so if you receive a phone call claiming to be the IRS, hang up immediately. Most importantly, never give out your social security number or Tax ID number to anyone over the phone or via email.
Protect Your Data and IdentityIn our digital age, we’re accustomed to entering our most private information across the internet, and protecting that info with sub-par passwords. The best defense against tax identity theft is strong password protection. Rather than using your mother’s maiden name or favorite color, use complex passwords that are combinations of upper and lowercase letters, numbers, and symbols. Don’t use common string of numbers or easily identified information. In addition, watch what you put on social media sites. Personally identifying information can be the key an identity thief needs to enter your bank account, tax prep software, online accounting software, and more. Limit your social media to only people you know personally and don’t make your accounts public. Finally, never sign into personal accounts on public computers, such as the computer at the library or even a shared work computer.
Warning Signs of Tax Identity TheftIdentity theft is nefarious and scary, but with a discerning eye, it’s possible to identify warning signs that your identity may have been stolen. You may have been a victim if:
- You are unable to e-file your taxes because of a duplicate Social Security number
- You receive seemingly random IRS notices informing you that:
- An online account that you have not created has been created in your name
- An online account that you have not accessed recently has been accessed or disabled
- You owe additional tax or refund offset from a year in which you did not file a return
- You have had collections taken against you for a year in which you did not file a return
- You receive income information from an employer whom you don’t work for
- You receive information about a suspicious tax return that you did not file.
Tax Identity Theft and Your Tax RefundIf you have been the victim of tax identity theft, your refund will be delayed until the IRS resolves your case. According to the IRS, most tax identity theft cases are resolved in 120 days, but more complex cases can take 180 days or more.
Identity Theft Victim ResolutionFalling victim to tax identity theft may cause a lot of hardship, but all is not lost. It can be resolved. Here’s what to do.
Work with the IRS to Resolve Your TaxesIf you receive notice that your Social Security number has been compromised or have reason to believe that you’ve been a victim of tax identity fraud, the IRS will work with you to resolve the issue.
- If you receive a suspicious IRS notice: Call the listed phone number and explain your situation to the IRS
- If you can’t e-file due to a duplicate Social Security Number: File a Form 14039 with the IRS to notify them of your identity theft. The form is an identity theft affidavit that legally declares your circumstances to the IRS.