Tax identity theft happens when an identity thief swipes your Social Security number, files a tax return in your name and claims a fraudulent refund from the U.S. government. You may not know it’s happened until your legitimate tax return gets rejected or you receive a notice from the Internal Revenue Service, and by then it’s obviously too late.
Fortunately, there are things you can do to protect yourself from taxpayer identity theft.
Beware of Email Scams…
The IRS does not 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 email@example.com.
… & Phone Scams
Scammers often call claiming to be an IRS agent and threatening you with arrest or deportation if you don’t pay, or they ask for your financial information so they can send you a refund. Report scam phone calls to the Treasury Inspector General for Tax Administration at 1-800-366-4484 or online at IRS Impersonation Scam Reporting.
Note: Starting Spring 2017, the IRS has authorized four debt collection companies — CBE Group, Conserve, Performant and Pioneer — to collect on outstanding debts. It’s still unclear if these companies will be able to call you, but if your debt is being transferred to one of these companies, the IRS will send a written notice. The agency also noted you will never be asked to pay with a prepaid debit card and all checks should be made payable to the U.S. Treasury and sent directly to the IRS, not the collection agency. Furthermore, you should be made aware of electronic payment options through IRS.gov/Pay Your Tax Bill.
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 Scores
By checking your credit scores regularly, you can spot unusual activity through big, unexpected changes, which can indicate a thief has struck. You can monitor your credit scores through Credit.com’s free credit report snapshot. It provides two free credit scores, plus other tools to help you track how your credit is faring.
Check Your Tax Return History
You can find a record of your past tax returns on the Get Transcript page on IRS.gov. You can request multiple years if you are concerned someone has filed a return in your name.
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. There is usually a nominal fee associated with this action, and your credit will be locked until you unfreeze it.
- 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. You can use a fillable form at IRS.gov, print, then mail or fax the form as needed as you clear your tax record.
- Pay Your Taxes. Be sure to continue to pay your taxes and file your tax return on time, even if you must do so by mailing in paper forms.
- Stay Vigilant. If you contacted the IRS about taxpayer ID theft and did not receive a resolution, contact the Identity Protection Specialized Unit at 1-800-908-4490 about your case.
This article has been updated. It was first published Jan. 23, 2015.