What Is Tax-Related Identity Theft?
Tax-related identity theft happens when someone uses your stolen Social Security number to receive a fraudulent tax refund. You may not discover you’re a victim of this crime until you try to file your legitimate tax return online or by mail and the Internal Revenue Service lets you know a return has already been filed in your name.
And so the trouble begins.
Here’s the problem: If you are a victim of tax-related identity theft, it can take longer to get your refund. Plus, the criminal who filed a fake return using your personal information still has that data. You remain a target for other crimes.
In this article, you’ll learn the warning signs of tax-related identity theft, how to help protect yourself, and what to do if you become a victim.
5 warning signs of tax-related identity theft
It almost always comes as a surprise to find out that you may be a victim of tax-related identity theft. Here are five red flags.
- Your e-filed tax form is rejected.
- The IRS or your tax preparer tells you more than one tax return has been filed using your Social Security number.
- The IRS mails you a letter saying a suspicious return has been filed using your Social Security number.
- Your IRS record shows you were paid by an employer you don’t know. Why? Someone may have used your Social Security number to get employment. The employer reported subsequent income to the IRS.
- The IRS mails you a notice that you owe additional tax for a year you didn’t file a tax return.
How to help protect yourself from tax-related identity theft
Tax-related identity theft is a specific danger. Still, you’ll use many of the same tactics to help protect yourself as you would for other types of identity theft. Here are some tips.
- Guard your Social Security number. Provide it only when necessary. And keep your Social Security card in a secure place.
- Keep your tax records secure.
- Use strong passwords and change them periodically.
- Make sure your computer devices have security software with firewall, malware, and anti-virus protections.
- Learn how to recognize scams and other attempts to steal your personal information. These include phishing emails and calls and texts from impostors posing as representatives of your bank, your credit card company, or the IRS.
What to do if you become a victim of tax-related identity theft
The FTC recommends taking these steps.
- Go to identitytheft.gov to file a complaint with the FTC.
- Contact one of the three major national credit bureaus— Equifax, Experian and TransUnion—to place a fraud alert on your credit records. The bureau you contact will notify the other two.
- Contact your bank and other financial companies. Close any accounts opened without your permission. Also, close accounts that show any suspicious activity.
In addition, the IRS recommends these steps.
- Respond to any IRS notices and call the number that’s included.
- Complete IRS Form 14039, Identity Theft Affidavit, in two cases: one, your e-file return is rejected due to a duplicate filing under your Social Security number; or, two, the IRS instructs you to. Here’s how:
Use the fillable form at IRS.gov.
Print and attach the form to your paper return.
Mail the forms according to IRS instructions.
- Go ahead and pay your taxes with your mailed tax return.
Tip: No one wants to have their tax refund delayed, but tax-related identity theft will likely slow down the process. If you’ve done everything right and contacted the IRS, but still don’t have a resolution, here’s what to do: Call the IRS’s special assistance number at 1-800-908-4490.
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