How to Protect Yourself from Tax Identity Theft

During tax season, consumers must be extra vigilant with their personal information. Each year the IRS compiles a “Dirty Dozen” list detailing the most common tax scams of the year. Identity theft continues to make the list year after year.

What is tax identity theft?

Tax identity theft occurs when someone uses a stolen social security number to file a tax return and collects that taxpayer’s refund. These criminals may also gain employment, report income to the IRS, or claim your child as a dependent using your stolen personal information. Thieves obtain information by impersonating the IRS or other financial institutions, stealing wallets or mail, collecting personal documents from trash receptacles, email scams, and data breaches. This type of identity theft may result in lost refunds or the IRS taking collection action against you.

How do I know if my identity has been stolen?

Unfortunately, you may not realize your identity has been compromised until you file your tax return. The following situations may indicate that you are a victim of tax identity theft:

  • When you file your return, the IRS notifies you that a tax return has already been filed under your social security number.
  • The IRS sends you a letter stating you did not declare all of your income on your return.
  • You owe taxes or are subject to collection actions for a year in which you did not file taxes.

How do I prevent it?

It is critical to take preventative measures to safeguard your identity and avoid tax scams. Apply the following precautions:
File your tax return as soon as possible. Though filing early is not a guarantee against tax identity theft, it may prevent a thief from filing before you do.

Always protect your personal information. Keep sensitive documents, such as W-2s, your social security card, and filed tax returns in a secure location. Do not carry any of these documents on your person, especially your social security card, rather keep them in a safe place.

Properly dispose of tax documents. If you need to throw away old documents, be sure to shred all papers with personal identifiers.

Be careful when giving out information. Do not post personal details on social media, especially your address, birth date, credit card information, or social security number. Be wary of entering information online. If you do enter sensitive information, make sure you are using a secure network and the website has an “https” address.

Protect your computer. Keep anti-virus and malware protection software up to date to prevent hackers from accessing your information. Create strong and unique passwords for all of your accounts.

Be wary of tax scams. If you receive angry or threatening phone calls from the IRS, your bank, or any other financial institution, verify that is not an impersonator before giving out personal information. The IRS will never threaten you with police action. If you receive a suspicious phone call or email, contact the IRS directly. Be careful when checking emails. Do not download files or click on links from unknown sources.

What should I do if I am a victim?

Report and respond to tax identity theft as soon as possible by taking the following steps:

  • Follow up with any forms or letter from the IRS. Call the given number to discuss your situation.
  • Complete Form 14039, the Identity Theft Affidavit.
  • Keep copies of your correspondence with the IRS and make notes of phones call dates.
  • File a police report.
  • You may also file a complaint with the Federal Trade Commission and notify one of the major credit bureaus.
  • If you do not receive a resolution call the IRS at 1-800-908-4490.

The IRS is continually striving to increase security measures and prevent identity theft. However, it is important to take precautions and be aware of scams. Safeguarding your information and looking for warning signs is the best way to protect yourself.

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