Tax-related identity theft typically occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. Anyone can fall victim to identity theft. Here is an important reminder of how to protect yourself from identity theft, what to watch out for, and what do if your identity has been compromised:
1. Protect your Records. Do not carry your Social Security card with you, or any other documents with your Social Security Number (SSN) on them. Only provide your SSN if it is completely necessary and you know the person requesting it. Routinely change passwords for all of your Internet accounts and protect your personal information at home and protect your computers with anti-spam and anti-virus software.
2. Don’t Fall for Scams. Criminals often try to impersonate your bank, credit card company, and even the IRS in order to steal your personal data. Learn to recognize and avoid those fake emails and texts.
3. Beware of Threatening Phone Calls. The IRS will never call you threatening a lawsuit or arrest, or to demand an immediate tax payment using a prepaid debit card, gift card, or wire transfer. Generally, if you owe taxes, the IRS will first mail a bill to the taxpayer. Furthermore, The IRS initiates most contacts through regular mail delivered by the United States Postal Service. While there are certain circumstances when the IRS will visit your home or business, taxpayers will generally first receive several letters (called “notices “) from the IRS in the mail beforehand. The IRS will also not:
- Demand that you pay taxes without the opportunity to question or appeal the amount they say you owe. You should also be advised of your rights as a taxpayer.
- Threaten to bring in local police, immigration officers or other law-enforcement to have you arrested for not paying. The IRS also cannot revoke your driver’s license, business licenses, or immigration status. Threats like these are common tactics scam artists use to trick victims into buying into their schemes.
4. Report ID Theft to Law Enforcement. If you discover that you cannot e-file your return because a tax return already was filed using your SSN, please call the office immediately for assistance. Next, you will generally need to take the following steps:
- File your taxes by paper and pay any taxes owed.
- File an IRS Form 14039, Identity Theft Affidavit.
- File a complaint report with the Federal Trade Commission (FTC).
- Contact one of the three credit bureaus (Equifax, TransUnion, or Experian), to place a fraud alert or credit freeze on your account.
5. Complete an IRS Form 14039 Identity Theft Affidavit. File IRS Form 14039, Identity Theft Affidavit. Print out the form and mail or fax it according to the instructions. Continue to pay your taxes and file your tax return, even if you must do so by filing on paper.
6. IRS Notices and Letters. If the IRS identifies a suspicious tax return with your social security number on it, they may send you a letter asking you to verify your identity and will provide instructions on how to do so. You may need to call a special phone number or visit a Taxpayer Assistance Center. This is to protect you from tax-related identity theft.
7. IP PINs. If a taxpayer reports that they are a victim of ID theft or the IRS identifies a taxpayer as being a victim, he or she will be issued an IP PIN. The IP PIN is a unique six-digit number that a victim of ID theft uses to file a tax return. Each year, you will receive an IRS letter with a new IP PIN.
8. Data Breaches. If you learn about a data breach that may have compromised your personal information, keep in mind that not every data breach results in identity theft. Furthermore, not every identity theft case involves taxes. Make sure you know what kind of information has been stolen so you can take the appropriate steps before contacting the IRS.
9. Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can report it on the IRS.gov website.
10. IRS Website. Information about identity theft is available on the IRS website. There is also a special section devoted to identity theft with a phone number available for victims to obtain assistance.
If you have any questions about identity theft and your taxes, don’t hesitate to call.