This week is National Tax Identity Theft Awareness Week. It’s a good time to focus on tax ID theft prevention, as most Americans gear up to file their 2019 IRS tax returns.
Tax identity theft occurs when someone steals your Social Security Number (SSN) in order to file a false tax return in your name. The hacker’s goal is to get your refund before you even have a chance to file a return (btw – the IRS started to process ‘eFiles’ on 27 Jan). Hackers often use phishing attacks during tax season to trick people into giving away their SSN or into installing malware that can steal your data. Be aware of proper cyber hygiene to protect yourself from these types of attacks but also be aware of specific tax season threats. Below we tell you what to look for and offer some tips to protect yourself from tax identity theft.
Three Ways to Protect Yourself Against Tax Fraud
1 – File as Early as Possible
Tax identity theft relies on fraudsters getting a return submitted in your name before you do. If someone has your SSN, they can accomplish this relatively easily. Filing your return early keeps hackers from being able to file fraudulently. Once you have all of your W2s, don’t wait – file asap.
In 2018, 649,000 fraudulent returns attempted to claim $3.1 billion in refunds
2 – Take Steps to Protect Your SSN
Your SSN is necessary to use your identity for tax ID theft. Taking steps to protect your SSN helps you minimize the risk of tax identity theft (and a host of other problems). There are standard best practices you can follow:
- Don’t carry your Social Security card in your wallet or purse – Keep your cards locked up at home.
- Get a locking mailbox and retrieve your mail promptly every day.
- Shred documents that include your SSN and other personal data before you toss them.
- Avoid putting your SSN on forms whenever you can.
3 – Only Trust Mailed IRS Communications
Whether you’ve already filed or not, you should never trust any communication from the IRS unless it’s an official, mailed letter. The IRS will never email you, text you, call you on a phone (even your home landline) or send you a message over social media to initiate contact.
How to Know if You are a Victim of Tax Related Identity Theft
If you have already been victimized there are certain red flags to look out for. Below are the signs that a fraudulent return may have been filed in your name.
- You are unable to e-file due to a duplicate SSN
- You receive a tax transcript that you did not request
- The IRS sends you a letter regarding a suspicious tax return you did not file
- The IRS notifies you about an online account made in your name
- IRS records show you receiving income from an employer you don’t know
- The IRS notifies you that you now owe additional tax or refund offset
- The IRS notifies you that a collection action is being taken against you for a year you did not file a return
What to do if you are a Victim of Tax Fraud
The IRS has specific recommendations for what to do if your SSN is compromised and you suspect someone has filed a fraudulent return in your name. The IRS recommends that you do the following:
- Respond immediately to any IRS notice
- Continue to pay your taxes and file a paper return
- If you discover that a fraudulent tax return has been filed with your SSN, you must first file IRS Form 14039 to alert the IRS that you’re a victim of ID theft
- Visit IdentityTheft.gov for what you should do right away to protect yourself
- Get a copy of the fraudulent return