While many people consider March and April to be tax time, January and February are the prime season for identity thieves hoping to rake in thousands of dollars.
That's because tax fraud criminals often file false tax returns early using stolen Social Security numbers, hoping to claim thousands of dollars in refunds. In many cases, whoever files first, be it the thief or the legitimate claimant, gets the refund first.
Tax identity theft is the most common form of identity theft reported to the Federal Trade Commission. As part of Tax Identity Theft Awareness Week, the FTC offers these tips to avoid being a victim:
- File your tax return early in the tax season, if you can, before identity thieves do.
Individuals can start filing their taxes as soon as January 31 this year. If you owe tax, you can still file the return early and then wait to send your payment until April 15.
- Use a secure Internet connection if you file electronically, or mail your tax return directly from the post office. Don’t use unsecure, publicly available Wi-Fi hotspots at places like coffee shops or a hotel lobby.
- Shred copies of your tax return, drafts, or calculation sheets you no longer need.
- Respond to all mail from the IRS as soon as possible.
- Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail.
- Don’t give out your Social Security number or Medicare number unless necessary. Ask why it’s needed, how it’s going to be used, and how it will be stored.
- Get recommendations and research a tax preparer thoroughly before you hand over personal information.
- Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.
Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or IRS records show they received wages from an employer they don’t know. If you get a letter like this, says the FTC, don't panic. Call the IRS Identity Protection Specialized Unit at 1-800-908-4490 if you get a letter like that, or if you have any reason to believe your Social Security or Medicare number has been compromised. (If you're a LifeLock member, also report it to us at 1-800-LifeLock so we can help.)
More information about tax identity theft is available from the FTC at and from the IRS.