Brace yourself: Tax fraud isn't going away, and if you haven't already filed your return, you could be the next victim.
Tax identity theft happens when someone files a phony tax return using your personal information—like your Social Security number (SSN)—to get a tax refund from the IRS. It also can occur when someone uses your SSN to secure a job or claims your child as a dependent on a tax return. Tax identity theft is the most common form of identity theft reported to the FTC. The IRS has stated that it is a top priority, hiring new staff, exploring new technologies and adopting new procedures to fight it.
Tax identity thieves get a hold of personal information by:
- Going through trash or steal mail from homes or cars
- Sending phony emails that look like they’re from the IRS and asking for personal information
- Stealing it from their workplace, like a hospital, nursing home, or financial institution
- Posing as a phony tax preparer, misusing clients’ information or passing it along to identity thieves
So what can you do about it? To lessen the chances of becoming a victim:
- File your tax return early in the tax season, if you can, before identity thieves do.
- Use a secure Internet connection when filing electronically. Or mail tax returns directly from the post office. Don’t use unsecure, publicly available Wi-Fi hotspots at coffee shops or a hotel lobbies.
- Shred copies of your tax return, drafts, or calculation sheets that are no longer needed.
- Respond to all mail from the IRS as soon as possible.
- Know the IRS won’t contact you by email, text or social media. If the IRS needs information, it will contact you by mail.
- Don’t give out your SSN or Medicare number unless necessary. Ask whyit's needed, howit's going to be used, and how it will be stored.
- Get recommendations and research a tax preparer thoroughly before handing over personal information.
- Contact the IRS ID Theft Protection Specialized Unit at 1-800-908-4490 if your SSN has been compromised.
- Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.
Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or when IRS records show they have received wages from an employer they don’t know. If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.
If you suspect you're a victim, contact your financial institution, employer or insurer. You already may receive identity management services through them.