What to do in the event of tax identity theft?
What is tax identity theft?
Tax identity theft occurs when an identity thief files a fraudulent return using a stolen taxpayer’s social security number to claim the victims tax refund. The thief would use the victims personal and consumer information to file the forged tax return, usually early in the filing season before the victim files themselves. This way, the scammer would likely receive the victims refund before the IRS processes the real filing. They might invent fake wages to submit the information electronically.
Per the Identity Theft and Assumption Deterrence Act, the punishment for tax identity theft is a maximum penalty of 15 years imprisonment, a fine and forfeiture of any personal property used or intended to be used to commit the crime.
Signs a taxpayer might have become a victim of fraudulent tax filing:
- Your tax return was rejected because more than one tax return was filed
- IRS records indicate you received more wages than you actually earned
- An unexpected letter arrived from the IRS which does not appear to apply to you
- You get a letter from the IRS inquiring about a suspicious tax return that you did not file
- You get a tax transcript in the mail that you did not request
- You get an IRS notice that an online account has been created in your name or that your existing online account has been accessed or disabled when you took no action
What do I do if I am a victim of tax identity theft?
If you find yourself a victim of tax identity theft, you will want to continue to pay your taxes and file your tax return, even if you must file a paper return. If you received a notice from the IRS, be sure to respond immediately with your tax professional. Keep copies of your records and check your credit report and bank records for accuracy. You may also consider freezing your credit or closing inactive or exposed accounts. If your e-filed return was rejected because of a duplicate filing under your social security number, complete IRS Form 14039, Identity Theft Affidavit.
- Report tax identity theft to the IRS at 1-800-908-4490
- Report the improper use of your SSN to the Social Security Administration at their fraud hotline by calling 1-800-269-0271
- Visit IdentityTheft.gov
- Reach out to your tax professional to talk about the best steps to take for your situation