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Tax Identity Theft

March 14, 2016

Tax-related identity theft occurs when someone uses your Social Security Number (SSN) to file a tax return claiming a fraudulent refund. You may not even know this has happened until you efile your retune and you discover a return has already been filed with your SSN. Or, the IRS may send you a letter saying they had identified a suspicious return using your SSN.

Warning Signs
Be aware of possible tax-related identity theft if you are contacted by the IRS or your tax professional/provider about:

  • More than one tax return was filed using your SSN

  • You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return.

  • IRS records indicate you received wages or other income from an employer for whom you did not work.

What to do if you are a Victim
If you become a victim of identity theft, the Federal Trade Commission (FTC) recommends these steps:

  • File a complaint with the FTC at identitytheft.gov.

  • Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records.

  • Contact your financial institutions and close any accounts opened without your permission.

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:
Respond immediately to any IRS notice.
Complete IRS Form 14039.
Continue to pay your taxes and file your return, even if you must do so by paper.
If you previously contacted the IRS and did not have a resolution, contact them for specialized assistance at 1-800-908-4490. They have teams available to assist.

Reducing Your Risk
The IRS, states, and tax industry have joined together to protect your data.

  • Always use security software with firewall and anti-virus protection. Use strong passwords.

  • Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card companies, or the IRS.

  • Do not click on links or download attachments from unknown or suspicious emails.

  • Protect your personal data. Don’t carry your Social Security card, and make sure your tax records are secure.

The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

Source: Carrie Johnson, South Dakota State University