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Warning Signs of Tax-Related I.D. Theft and How to Protect Yourself

irs form 1040

For most people, dealing with the Internal Revenue Service is an unwelcome undertaking. But if you are a victim of tax-related I.D. theft, the IRS is the first place you want to contact to obtain assistance. The issue has been important enough to warrant the collaboration between the IRS, the states, and tax industry professionals, who have launched safeguards to combat the problem. To aid the public, Business Consumer Alliance offers helpful information on how to recognize tax-related I.D. theft, resources for affected individuals, and tips to help you reduce the risk of becoming a victim.

Spotting Tax-Related Identity Theft

Tax-related I.D. theft is when someone steals your Social Security number (SSN) to file a tax return and claim a refund. Or someone may use your social security information to obtain a job. Thieves have also been known to steal the social security information of children to fraudulently claim them as dependants in order to receive a higher tax return.

Victims are usually unaware that someone else has filed a return until they receive a letter from the IRS or their tax professional alerting them that more than one tax return was filed using their SSN or regarding unreported earnings from an employer for whom they did not work. If you receive similar notices in the mail, it is important that you act right away. There are certain steps you must take to restore the damage committed by I.D. thieves.

What You Can Do

If you believe someone is or has used your information to file a fraudulent return, the first and most important step is to contact the IRS right away. You can respond to the IRS notice, call the IRS Identity Protection Specialized Unit at 1-800-908-4490 for assistance, or, if instructed, visit www.IDVerify.irs.gov. You may be required to complete an Identity Theft Affidavit if your electronically filed tax return is rejected because of a duplicate filing under your SSN or if you’re instructed to do so. The IRS further advises to continue paying your taxes and file your tax return, even if you must do so by paper.

Some additional steps to take include:

  • Filing a police report.
  • Report the incident to the Federal Trade Commission at www.identitytheft.gov or by calling their Identity Theft Hotline at 1-877-438-4338.
  • Contact one of the major credit bureaus, ExperianEquifax, or TransUnion to place a fraud alert on your record.
  • Close any accounts opened fraudulently and contact your financial institutions to inform them of the incident.

Data breach victims should submit an Identity Theft Affidavit if their SSN has been compromised, if the IRS rejects your electronically filed return as a duplicate, or if the IRS has informed you that you may be a victim of tax-related identity theft.

Tips to Reduce Your I.D. Theft Risk

Scammers and thieves are constantly at work on new ways and methods to defraud unsuspecting individuals. Be vigilant in keeping your personal information as secure as possible. Be suspicious of unsolicited calls, emails, texts, or other communications that request personal information. It may be a scammer trying to con you. Take precautions and keep documents such as your Social Security card, birth certificate, and any paperwork with your SSN, I.D. or driver’s license number, tax documents, credit applications or offers, bank account information, or any other sensitive information in a secure place. Thieves aren’t above searching through trash, stealing mail, or other unscrupulous acts to get your information. Be careful and shred anything with sensitive information that you no longer need so it is not picked up by someone with a nefarious intent. Check out the related topics below for more resources, including how to file a credit freeze, securing your home network, and coping with I.D. theft.

Keep updated on trending news, scam alerts, and valuable advice on a variety of topics by following BCA’s Facebook and Twitter pages. Don’t forget to share the information with others.

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About Business Consumer Alliance Business Consumer Alliance (BCA) is a non-profit company that started in 1928. The broad purpose of BCA is to promote business self-regulation. BCA's mission is achieved by assisting consumers in resolving complaints with businesses and using that complaint information, along with other relevant information such as customer reviews, to forecast business reliability. With community support, BCA can identify trustworthy and ethical businesses and warn the public to avoid unscrupulous businesses whose purpose is to defraud the marketplace. BCA also helps businesses promote themselves by providing services and tools to protect their business and reach out to their customers. BCA obtains its funding from member businesses who support the mission and purpose of the organization and who agree to abide by high standards of ethical business practices.