It’s tax season… Would you know how to tell if you were the victim of tax-related identity theft?
The recent high profile data breaches (such as: Target, Neiman Marcus) that have occurred during the past few months have also helped to increase public awareness of the overall vulnerability their personal information. But, it is very important to remember that identity theft is not just limited to basic debit or credit card theft. Since 2010, tax identity theft – the theft of personal information to file fraudulent tax returns, has become the form of identity theft with the most accelerated growth rate!
Unfortunately, identity thieves usually begin their work long before tax season begins. These thieves are finding creative ways to gain access to an individual’s personal information through lost/stolen wallets and cell phones, information gathered from trash that contains intact documents, theft from unlocked mailboxes, unsecured Internet websites or Internet connections (wifi), and phishing emails…throughout the entire year.
It is important to know that identity thieves can use a stolen Social Security number (SSN) to file for a tax refund in the victim’s name. Experts recommend that individuals FILE EARLY because if the identity thief files a tax return using your SSN before you submit your taxes, chances are that the thief will get YOUR refund. By the time you submit your taxes, your refund will have already been paid out!
With the ease of filing electronically, it is possible to file returns without any verifying documentation (such as a social security card or driver’s license). The IRS currently has no independent verification system for validating tax returns. So in a situation where an identity thief files a fraudulent tax return using your SSN, you may not even be aware that you are a victim of tax identity theft until well after the fact…when you actually attempt to file your tax return and the IRS follows up by sending you an unexpected letter stating that you may not file more than one return. Unfortunately, the IRS doesn’t know that someone else is using your SSN.
If you believe that you may be a victim of tax identity theft:
- contact the IRS Identity Protection Specialized Unit immediately at: 1-800-908-4490.
The IRS Identity Protection Specialized Unit should be notified immediately if you receive a notice from the agency stating: more than one tax return was filed for you, that you have a balance for a year you didn’t file, a refund off-set, that you received wages from an employer you don’t know or collection actions are being taken against you during a tax year when you did not file.
In addition, you should:
- Report your case to the Federal Trade Commission and:
- Create an “Identity Theft Report
- Complete an “Identity Theft Affidavit”
- File a local police report.
- Review your credit reports and place a “fraud alert” on all of them.
- Record all communication you have during the troubleshooting process, and maintain copies of letters received and sent.
- Remember: 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.
- More information about tax identity theft is available from the Federal Trade Commission (FTC) at https://www.consumer.ftc.gov/articles/0008-tax-related-identity-theft and the Internal Revenue Service (IRS) at https://www.irs.gov/uac/Identity-Protection