Warning Signs That You’re a Victim of Tax Refund Identity Theft

Tax season is officially underway. The IRS began accepting 2014 returns on Jan. 20, 2015, and that means identity thieves are hard at work filing phony returns that loot the U.S. Treasury and leave victimized taxpayers to clean up the mess. The crooks have just three months to scoop up as many billions as they can get from filing phony returns to get tax refunds. They got away with $5.2 billion in 2012, according to audited government figures, so a lot is at stake.

While some taxpayers consider themselves vulnerable because their information was stolen during a hack on a store or restaurant, most Americans won’t suspect a thing until it’s too late.

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So what are the warning signs to watch for? The IRS says that if you receive one of these notices, it could be the first sign that you're a victim of ID Theft:

  1. More than one tax return was filed using your SSN
  2. You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return
  3. IRS records indicate you received wages from an employer unknown to you

After you receive one of these notices, the IRS recommends:

  • Respond immediately to any IRS notice; call the number provided
  • Complete IRS Form 14039, Identity Theft Affidavit. You’ll need to fill out the form online, print it, and then mail or fax it according to the online instructions
  • Continue to pay your taxes and file your tax return, even if you must do so by paper instead of electronically. The April 15 deadline still applies and you may be subject to penalties if you fail to pay your taxes on time

The IRS will investigate your claim by comparing income on the two tax returns with income statements filed by the employers. It will take months, and if you’re expecting a refund you will not receive it until the investigation is complete and your name is cleared.

In addition to handling your business with the IRS, you should also go through the normal steps for ID theft:

  • File a report with local police
  • File an online complaint with the Federal Trade Commission or phone the FTC Identity Theft Hotline at 1-877-438-4338
  • Contact one of the three major credit bureaus—Equifax, Experian, TransUnion—to place a ‘fraud alert’ on your credit records

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