IRS identity theft is defined as someone using a Social Security number that is stolen to claim a Federal or State tax refund fraudulently. The victim may be unaware until they file a return of their own and receives a notice from the IRS that the return was rejected because the Social Security number had already been used. It is vital that steps that protect personally identifiable information be taken.
An unexpected email from the Internal Revenue Service offering you a tax refund or credit reports is always a scam set up by identity thieves The IRS does not contact taxpayers by social media or email to request financial or personal information. Forward a scam email that claims to be from the IRS to [email protected].
Unexpected phone calls from people claiming to be IRS agents and threatening deportation or arrest for failure to pay immediately are scams. Sometimes, the callers will request financial information as they claim they are preparing to send a refund.
Report all schemes and suspected fraud calls to the Tax Administration Treasury Inspector General at 1-800-366-4484. Websites that do not begin with ‘www.irs.gov’ are not IRS websites. Forward the links to [email protected].
Warning signs also include having collection action taken for a year a tax return was not filed or a refund offset or owing additional taxes. The IRS records may indicate wages or other income received from a person or employer for whom you did not work.
Protecting Your Social Security Number
Keep your Social Security card and other documents with your SSN on it in a safe place. It is not a good idea to routinely carry around documents that display your SSN. Be cautious of giving your Social Security number when asked for it.
Only share it when absolutely necessary. Protect financial information on your computer or in your home. Annually check the earnings statement from the Social Security Administration. Make an annual credit report check.
Protect personal computers by
- Changing Internet account passwords with strong passwords
- Update security patches
- Use anti-virus/spam software
- Use firewalls
Protect personally identifiable information by providing your Social Security number only when you initiate contact and are confident you know who is asking. To reduce risk, learn to recognize and avoid threatening calls, phishing emails, and texts from posers of organizations like the IRS, credit card companies, and your bank.
Not all computer hacks or data breaches result in identity theft. All identity theft is not tax-related. It is essential to know what type of personally identifiable information is stolen. Did the data breach compromise your Social Security number?
Ask the company what is being done to protect your Social Security number or your credit card. The Federal Trade Commission makes the following recommendations. If someone uses your personal information to make purchases, file taxes, or open accounts, the federal government is a one-stop resource to report and recover from theft.
When you receive a notice that a data breach caused a company to lose your personal information, you lose your wallet, or learn of an online account being hacked, follow the steps recommended on this government site when the information that is exposed or lost includes:
- Social Security Number
- Online Password or Login
- Credit or Debit Card Number
- Driver’s License Information
- Bank Account Information
- Children’s Personal Information
Follow the site’s recommendations when you are affected by specific data breaches involving Equifax, IRS Data Retrieval Tool for FAFSA, or Yahoo. A personal recovery plan can be developed at https://identitytheft.gov if you want to report identity theft, someone files an income tax return using your information, or a data breach exposed your information.
Local law enforcement will take a police report if asked. A police report is required by some businesses to remove fraudulent debt from the account of a victim. Attorneys, working with identity theft victims, may find the pre-filled forms and letters to send to debt collectors, businesses, and credit bureaus helpful.
Identity theft is burdensome to victims and presents a challenge to government agencies, organizations, and businesses. The Internal Revenue Service combats tax-related identity theft with victim assistance, detection, and prevention strategies.
Progress is being made, and it remains a high priority. The tax industry, which includes software providers and tax preparers, and the states have joined the IRS to enact safeguards and take actions to combat identity theft that is tax-related. Many are invisible, but valuable, to the fight against criminal syndicates. There are new login standards that are required of those who use tax software to prepare their taxes
If you suspect or know you are a tax-related victim of identity theft and believe your Social Security number has been compromised, respond to any IRS notice immediately. You will be provided a number to call.
If identity theft is suspected, file your return and pay any taxes calculated, even if a paper return has to be submitted. Complete an Identity Theft Affidavit, known to the IRS as Form 14039, if you eFile a return that is rejected due to a duplicate filing with your Social Security number.
There is a fillable form found on the IRS website. Print it and attach it to your income tax return and mail as directed. Form 14039 can also be faxed or mailed separately to the IRS. File the form just one time. Be on the lookout for IRS follow-up correspondence and respond quickly. If contacting the IRS does not resolve the situation, specialized assistance is available at 1-800-908-4490.
Remember, the IRS will not initiate contact by email to request financial or personal information. The IRS does not send any electronic communication like social media channels or text messages. Cybercriminals are continuously evolving and the IRS and tax industry must also change.
Other Actions to Take
File an FTC complaint. Contact TransUnion, Experian, or Equifax to place a ‘fraud alert’ on your credit records. Contact financial institutions and close credit or financial accounts that were tampered with by an identity thief or opened without your permission.