Tax identity theft happens when an identity thief swipes your Social Security number, files a tax return in your name and claims a fraudulent tax refund in your name. You may not know it’s happened until your legitimate tax return gets rejected or you receive a notice from the Internal Revenue Service (IRS). And by then, it’s too late.
Fortunately, there are things you can do to ensure you don’t become a victim of taxpayer identity theft.
Avoid Email Scams
The IRS doesn’t contact taxpayers by email or social media to request personal or financial information. If you receive such a communication, report it to the IRS by forwarding it to firstname.lastname@example.org.
Beware of Phone Scams
Scammers often call claiming to be an IRS agent and threaten you with arrest or deportation if you don’t pay them. Or they ask for your financial information so they can send you a refund check. Report a scam phone call to the Treasury Inspector General for Tax Administration at 1-800-366-4484 or online at IRS Impersonation Scam Reporting.
As of 2017, the IRS authorized four debt collection companies—CBE Group, Conserve, Performant and Pioneer—to collect on outstanding debts. These companies will never ask you to pay with a prepaid debit card. And all payment checks are made payable to the U.S. Treasury and sent directly to the IRS, not the collection agency. These agencies should also inform you of electronic payment options available on www.irs.gov/payments.
Text messages purporting to be from the IRS are also a scam. Be sure to report them as well.
Protect Your Social Security Number
Never carry your Social Security card in your wallet. Keep your Social Security card and any other document that shows your Social Security number in a safe place. Also:
- Only share your Social Security number when absolutely necessary
- Safeguard your personal financial information in your home and on your computer—change online passwords regularly
- Review your credit reports and your Social Security Administration earnings statement each year for accuracy
Monitor Your Credit Score
By checking your credit score regularly, you can spot unusual activity. Big, unexpected changes can indicate a thief has struck. You can get a free Experian credit score and a free credit report card from Credit.com. Your report card includes tips to help you track how your credit is doing. Your score and report card are updated every 14 days.
Check Your Tax Return History
You can find a record of your past tax returns on the Get Transcript page on IRS.gov. If you’re concerned someone has filed a federal return in your name, you can get transcripts for multiple years of returns.
Be Aware of Employment Related Identity Theft
It’s possible that your Social Security number may have been used by someone for employment purposes. There are several signs to watch for that might point to employment identity theft:
- You receive a request for the verification of unreported income, payments or credits
- You receive a notice asking to check your records to confirm the income you received
- You receive a tax document like a W2 or Form 1099 for a job you don’t know of
- You receive a Social Security notice saying that your benefits have been denied or adjusted because of wages you’re unaware of
- The IRS sends you a CP01E Employment Related Theft Notice
- The Social Security Administration sends you a notice stating that you received more income than you have actually earned that year
If you received any of these notices, it might be time to secure your personal information and see if there has been any effect on your tax accounts or tax liability.
You should order a transcript of your tax return the Get Transcript page on IRS.gov to see your tax account and verify that all the information contained is accurate. To get a transcript online, have your Social Security number, date of birth, filing status and the mailing address you used on your most recent tax return. You also need to have access to your own personal email account, a personal account number, such as that of a mortgage or home equity loan, and a mobile phone number that includes your name on the account. You can then view, print and download your transcript online quickly and easily.
If you do find inaccuracies, you then need to report these inaccuracies to the IRS and file an amended tax return. You can’t file an amended return online. You have to send it by postal mail.
If you’d rather not order your tax transcript online, you can order it through the mail. To do so, you need your Social Security number, date of birth and the mailing address listed on your most recent tax return. Once the IRS has your request, it takes 5 to 10 calendar days to receive your transcript.
What to Do If You Are a Victim of Tax Identity Theft
- Report the crime. File a report with your local police and file a complaint with the Federal Trade Commission at www.identitytheft.gov or by calling the FTC Identity Theft Hotline at 1-877-438-4338.
- Request a fraud alert. Contact one of the three major credit reporting agencies—Equifax, Experian or TransUnion—and ask that a fraud alert be placed on your credit records. Alternatively, you can request a credit freeze, which will stop any new credit accounts from being opened in your name. In the wake of the Equifax data breach, it’s free to put a freeze on your credit reports.
- Close fraudulent accounts. Close any credit or financial account that has been tampered with by a thief or opened without your permission.
- Contact the IRS. Call the number provided on any IRS notice informing you of the fraud. Complete IRS Form 14039, Identity Theft Affidavit. Print, then mail or fax the form to clear your tax record.
- Pay your taxes. Be sure to continue to pay your taxes and file your income tax return on time.
- Stay vigilant. If you contacted the IRS about taxpayer ID theft and didn’t get a resolution, contact the Identity Protection Specialized Unit at 1-800-908-4490 about your case.
How to Fight Identity Theft
If you’re a victim of identity theft or want to avoid becoming one, there are several things you can do to protect your money and personal information. If you suspect identity theft, consider getting replacement debit and credit cards. You should also be suspicious of unsolicited emails, phone calls or even suspicious letters through regular mail.
Hackers and identity thieves may have fraudulently gained access to personal information, such as your address, phone number and email address, and be sending phishing emails as a way to gain more information from you. Be suspicious and don’t respond to anything that raises a red flag. If you have any reason to doubt an email, call the company and verify its validity before responding.
You should also be sure to regularly monitor your credit score. And be sure to check your credit reports from all three bureaus annually through AnnualCreditReport.com. Tax time is a great time to check your reports. It’s also a good time to start tracking your credit more regularly, with Credit.com’s free Credit Report Card and Experian credit score, which are updated every 14 days. Changes in your score can indicate identity theft quickly and alert you to take action.
This article was originally published January 23, 2015, and has since been updated by another author.