Tax-related Identity Theft

Identity theft. For many of us, it is something really don’t know much about, but that we dread – knowing that it can wreak havoc on our lives.  Thankfully, our modern banking institutions are well-equipped to combat banking fraud, and we have many services that render help when our identities have been compromised. But what happens when you’re the victim of tax-related identity theft? In today’s blog, I will discuss tax-related identity theft and what you can do about it.

What is tax-related identity theft?

Tax-related identity theft is the process by which someone uses your Social Security number (“SSN”) and files a tax return to claim a fraudulent refund. You’re often not even aware it is happening until you eFile your return and get alerted that a return using your SSN has already been filed. The IRS may also send a letter to you stating it has noticed a suspicious return has been filed using your SSN.

Are there any warning signs?

There are a few common warning signs of tax-related identity theft of which you can be aware:

  • More than one tax return has been filed using your SSN
  • You owe additional tax, have a refund offset, or collections actions have been taken against you for a return or a year you did not file
  • IRS records show wages or income from an employer for whom you didn’t work

If you suspect you are a victim of tax-related identity theft, it is important to continue to pay your taxes and timely file your tax return – preferably by paper and US Mail.

Oh, No! Someone has filed a return with my SSN! What now?

The Federal Trade Commission (“FTC”) recommends the following steps:

  • File a complaint with the FTC at identitytheft.gov (insert hyperlink)
  • Place a “fraud alert” on your credit records with one of the three major credit bureaus listed below
    1. Equifax – equifax.com, 800-525-6285
    2. Experian – experian.com, 888-397-3742
    3. TransUnion – transunion.com, 800-680-7289
  • Contact your financial institution(s) and close any financial or credit accounts opened without your permission or tampered with by identity thieves

If you know for certain that your SSN has been compromised and suspect you are a victim of tax-related identity theft, the IRS recommends the following additional steps:

  • Respond immediately to any IRS notice, and call the number provided on the notice
  • Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return is rejected because of a duplicate filing under your SSN or you are instructed to so do.
    1. Use the fillable form at IRS.gov, print, then attach the form to your return and mail according to the instructions given.

If you’ve contacted the IRS and received no resolution, call the specialized assistance team at 800-908-4490.

Can I be proactive against tax-related identity theft?

Absolutely. Here are some ways the IRS recommends for you to be proactive against identity theft:

  • Always use strong passwords and utilize security software with anti-virus and malware protection
  • Learn to detect and avoid phishing emails, threatening phone calls and texts from thieves posing as agents from your bank, credit card company, or the IRS
    1. The IRS will not contact you to request personal or financial information via email, text messages or social media
    2. The IRS will not call you to tell you that a lawsuit has been filed against you
  • Do not click on links or download attachments from suspicious or unknown email senders
  • Protect your personal data by refraining from routinely carrying your Social Security card, and make sure your tax records are safe and secure

You may also report any suspicious online or email phishing scams to phishing@irs.gov. To report phishing scams by phone, fax, or mail, call 1-800-366-4484. Report any IRS impersonation attempts to the Treasury Inspector General for Tax Administration by filling out the report at https://www.treasury.gov/tigta/contact_report_scam.shtml. While it may take several minutes to fill out the report, it’s a step towards protecting our fellow citizens against malicious behavior.

 

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Written by Robert V. Boeshaar

Robert V. Boeshaar

Robert V. Boeshaar is a Seattle tax attorney committed to helping individuals and small businesses who are facing problems with the IRS. He believes in using his experience to serve others and to make a difference in their lives.