Taxpayer Guide to Identity Theft

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Tax identity theft occurs when someone uses your Social Security number to file a fraudulent tax return to get a refund. This is a major issue that the IRS is trying to address, but they cannot win this fight alone. There are steps that you both as a taxpayer and a business owner can take to protect yourself from identity theft and fraud.

How to Reduce Your Risk

  • Use security software with firewall and anti-virus protections. Also, use strong passwords and routinely change them.
  • Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations. Do not click on links or download attachments from unknown or suspicious emails.
  • Protect your personal data. Don’t routinely carry your Social Security card, and make sure that your tax documents are secure.

If you believe you are a victim of tax identity theft, look for these red flags:

  • More than one tax return has been filed using your SSN.
  • You owe additional tax, your refund is offset or collection actions have been taken against you for a year you did not file a tax return.
  • IRS records indicate that you received wages or other income from an employer that you did not work for.

If you do become a victim of identity theft:

  • File a complaint with the FTC at identitytheft.gov.
  • Contact a major credit bureau, such as Equifax, Experian or TransUnion to place a fraud alert on your records.
  • Contact your financial institutions and close all accounts that were opened without your permission or tampered with by thieves.

If your SSN is compromised and you know or suspect you are a victim of Tax Identity Theft, the IRS recommends:

  • Respond immediately to any IRS notice, and make sure to follow the directions on the notice. Messages and notices from the IRS will come through postal mail, not through email or phone calls.
  • Fill out Form 14039, the Identity Theft Affidavit.
  • Continue to pay your taxes and file your tax return, even if you must paper file the return rather than e-File.
  • IP PINs: If you are a confirmed ID theft victim, the IRS may issue an IP PIN. The IP PIN is a unique six-digit number that you will use to e-File your tax return. Each year you will receive an IRS letter with a new IP PIN.

With your help, the IRS stopped 1.4 million confirmed ID theft returns and protected $8.7 billion in 2015. In the past couple of years, more than 2,000 people have been convicted of filing fraudulent ID theft returns. As taxpayers and tax professionals, let us do our part to help combat identity theft.

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