As technology becomes more and more integrated into our everyday lives, the cases of identity theft have increased as well. When you make payments or file your taxes online, you risk putting sensitive information in the wrong hands, leaving you susceptible to identity theft.
That doesn’t mean you should completely disconnect from the internet and deny digital conveniences—it just means that you need to be incredibly careful and protect your identity any way you can.
Every year, numerous cases of IRS identity theft are reported by taxpayers, turning tax identity theft into a serious problem for both you and the government alike. If you’re interested in learning more about IRS identity theft, how it relates to your tax situation, and what you can do to prevent it, keep reading for more information.
Tax Identity Theft
Finding out that your identity is stolen can be a terrifying experience. Tax identity theft occurs when someone uses your Social Security number to file a fraudulent refund. The damage to one’s finances as a result of identity theft can be devastating for the individual; someone can open fraudulent bank accounts and lines of credit, racking up charges and expenses before the victim is even aware of the data breach.
It can also create filing complications and impose additional efforts on the IRS. When your identity is stolen, paperwork has to be filed so that the IRS knows they’re sending documents to the right individual or business—increasing staffing expenses for the federal government. Because of the prevalence of identity theft and the burden placed on the government, the IRS has started to combat tax-related identity theft with prevention strategies. However, the responsibility of resolving tax identity theft ultimately falls on taxpayers.
How to Prevent IRS Identity Theft
When 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.
- Don’t fall for scams: The easiest and most common way for identity thieves to scam people is to obtain information through a con. Fake charities or phishing campaigns are some of the most common ways identity thieves go about their business. Be aware of the signs of scamming and don’t give out any personal information to a solicitor.
- Protect your data: The simplest way to prevent IRS identity theft is to safeguard information like your Social Security and tax ID number. Make sure your computer has the latest security, and don’t visit questionable websites.
- Report suspicious activity: If you suspect that an organization or individual is stealing identities, report it to the authorities immediately. Preventing the spread of identity theft for others will reduce the rate at which it happens, so make sure you report with the FTC in addition to the police.
Preventing identity theft isn’t always easy, especially if you’re the victim of a data breach. There have been many cases of major retail corporations getting hacked and leaking the private information of their customers; in these scenarios, the victims of identity theft aren’t technically responsible. However, it does fall on the shoulders of the taxpayer to correct and fix the situation.
How Do I Know When Tax Identity Theft is Happening to Me?
There are several warning signs:
- If you find out more than one tax return has been filed with your Social Security number, you may have fallen victim to Tax Identity Theft.
- The IRS indicates that you received wages from an employer you don’t work for.
- You happen to owe additional taxes, refund offset, or had collections taken against you for a year(s) that you did not file a tax return.
What to do if You’re the Victim of IRS Identity Theft
Even though you may have lost your identity, you can still get it back. As the victim of identity theft, there are measures you can take to resolve your situation.
- Report ID theft to law enforcement: You may not be the only target of a particular scam, and the information you provide could be the missing piece the police need to find those responsible.
- IRS Form 14039: When someone fraudulently uses your Social Security number to file a tax return, report it to the IRS immediately. 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.
- Pay attention to notices: Once the IRS has confirmed your identity, they will send you essential notifications that contain secure information regarding your taxes and ID numbers. Check in with the IRS and make sure you’re receiving all the letters they are sending.
- IP PIN: Once the IRS has confirmed that you are the victim of tax identity theft, they will send you a unique six-digit number so that you can safely and securely file your taxes.
- Refund offset: As the victim of tax ID fraud, the IRS may be willing to forgive some of your debt with a refund offset. Not every individual or situation will allow for an offset, but it’s worth consulting a tax professional to see if you qualify.
Don’t let identity theft cripple your finances or your spirit—you’re not alone. With the help of the IRS and the right tax professional, you can recoup your losses and get your life back on track.
Contact a Tax Professional
Unfortunately, you can’t put life on hold just because you have been targeted by tax ID fraud. If you’re busy with work or taking care of your family, it can be difficult to file all the necessary forms and follow through with the IRS after becoming the victim of identity theft. Hiring a tax professional who can handle your case on your behalf is the easiest and fastest way to get your finances in good standing.
If you or a loved one has fallen victim to a possible tax identity theft, Community Tax can help. Our qualified professionals have helped hundreds of individuals resolve their complications with the IRS. Community Tax understands how terrifying and damaging tax identity theft can be, which is why we will do everything we can to make the process as easy as possible for you. With Community Tax, you won’t have to face the IRS alone and can find the support you need to solve your tax-related identity theft.