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What To Do In Case of Tax Identity Theft

By Thomas Van Blunk

In a world where we use technology every day from posting on social media to paying bills and taxes, it is more important than ever to be prepared in the event you or someone you know get their tax identity stolen. Tax identity theft happens when a person steals your social security number to file a tax return claiming a fraudulent refund. Most people do not even realize that their tax identity was stolen until they are notified by the IRS of an issue with their return. 

In addition to filing fraudulent tax returns, you may be a victim of tax identity theft if someone uses your Social Security number for employment purposes or if you been assigned an Employer Identification Number (EIN) that you didn’t request. 

According to the IRS here are some signs that your tax identity has been stolen (IRS, 2024):

  • The IRS sends you a letter inquiring about an apparent suspicious tax return that you did not file.
  • You can’t file your tax return because of a duplicate Social Security number.
  • You did not request the tax transcript that you receive in the mail.
  • You receive notification from the IRS that an online account was created in your name.
  • You receive a notice from the IRS that your current online account has been accessed or disabled.
  • You receive a notification from the IRS stating that you owe additional tax or refund offset, or you have collection actions pending against you for a year in which you did not submit a tax return.
  • The IRS states their records show you received other wages or income from an employer you have never worked for.
  • You have been assigned an Employer Identification Number that you did not request.

If you receive any of the notices stated above, it is urgent that you respond immediately. You can respond by calling the number provided to get assistance. Experts highly recommended that you report tax identity theft by visiting IdentityTheft.gov. From there they will start the process of creating an IRS identity affidavit. They also will create an FTC identity theft report and a personal recovery plan with streamlined checklists and sample letters to guide you through the recovery process. 

If you suspect tax identity theft, the IRS recommends to still pay your taxes and file a return. In cases where you tried filing your tax return electronically but it was rejected because of a duplicate filing under your Social Security number, you should fill out  Form 14039, Identity Theft Affidavit, attach it to a paper version of your tax return, and mail it to the IRS office based upon the state you reside. You also have the option to submit the form online and send your paper tax return separately. If after reaching out to the IRS, you were not able to get the help you needed, contact 800-908-4490 for specialized assistance.

There are some things you can do to prevent yourself becoming a victim of tax identity theft. One thing you can do is when creating passwords for websites that contain sensitive tax information instead of doing a simple password like “yourname123” you should use a phrase like “Myfavoritefoodtoeatisblank12?”. Stronger passwords make it more challenging for thieves to steal information. Also having security software that scans for potential malware and viruses that can harm your computer. It is also important to remain vigilant for any emails or scams that are looking to steal your tax identity. Do not click on suspicious links that are texted or emailed to you as they are more than likely trying to steal your tax identity. It is strongly suggested that you use encryption software when sending sensitive tax information in case someone tries to hack into your email. Finally, the IRS strongly recommends that you take advantage of two-factor authorization, when it is offered, because it offers an extra layer of security for your accounts that contain sensitive tax information.

Getting your tax identity stolen is a scary situation that can turn your life upside down if you are not prepared. Hopefully now you feel prepared if tax identity theft happens to you and now have new ways to protect yourself from tax identity theft.

This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for tax, legal, or accounting advice. If you have any questions regarding tax identity theft, please do not hesitate to contact us at Lear & Pannepacker.