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Identity Theft: Are you Tax Smart?


What To Know And Do About Tax-Related Identity Theft

With tax season upon us, it’s important to be smart when it comes to your security. With the rise in cyber-criminality, tax-related identity theft has become a common occurrence that affects many Americans every year. It occurs when someone uses your Social Security number to apply for a fraudulent refund on your behalf. Being tax smart is all about being aware of tax fraud and knowing what to do if it occurs to you. It’s important to bear in mind that not every data breach of your personal information results in identity theft and that there are other forms of identity theft committed that don’t involve taxes.

The IRS has implemented a number of safeguards to combat tax-related identity theft, including new log on standards. The problem with tax-related identity theft is that the victim is often not even aware that their identity has been stolen. It’s usually only discovered after the taxpayer tries to file their taxes under their Social Security number, and a return has already been filed. The IRS will contact the taxpayer to let them know that they have become a victim of identity theft.

There are a number of things you can do to prevent yourself from becoming a victim of tax-related identity theft:

1. Protect your personal details:

Keep your Social Security card in a safe place and make sure your computers are protected from spam and virus software. Do not provide your Social Security number to anyone or anything that is not verified. Always use secure software and strong passwords that are changed regularly.

2. Be wary of scams:

The IRS will never call about taxes without first mailing a bill. Scammers may pose as IRS agents or financial institutions, demanding immediate payment or querying outstanding taxes. Be alert for phishing emails and unsolicited text messages, calls or emails. If a tax scam incident happens to you, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484.

3. Keep an eye on your account:

Check your credit report and Social Security earnings record for any unusual activity throughout the year. Be alert for the warning signs such as discovering that more than one tax return was filed under your Social Security number, you owe additional tax or records indicate you received an income from an employer you didn’t work for.

4. Report any suspicious activity:

If you encounter tax fraud, you can visit and find out how to report suspected tax fraud activity.

What to do if you’re a victim of tax-related identity theft:

1. Report the identity theft immediately: (h3)
To do so you will need to:
• file a report with the Federal Trade Commission
• file a police report (to prevent the scammer from committing any other identity theft-related fraud)
• contact the three credit bureaus (Equifax, Experian or TransUnion) so they can freeze your account
• contact your financial institutions to cancel any accounts that were opened or tampered with without your authorization

2. Complete an Identity Theft Affidavit: (h3) After your police report has been filed, you will need to fill in an IRS Form 14039 Identity Theft Affidavit. You will need to print the form and mail or fax it according to the instructions. You must continue paying your taxes and filing your tax return during this period, even if it must be done by paper.

3. Wait for the IRS notice: (h3) Once the taxpayer’s identity has been verified, the agency will mail a notice that says the IRS is monitoring the taxpayer’s account. The notice may contain a unique Identity Protection Personal Identification Number (IP PIN) for tax filing purposes. The IP PIN is a unique six-digit pin that the victim uses to file a tax return.

Keep in mind that it can take up to 180 days to receive your tax refund if you are a victim of tax related-identity theft.