Tax ID Theft

What is tax identity theft?

It’s a fast-growing crime that costs taxpayers billions of dollars a year, and shows no signs of abating. Someone uses a taxpayer’s personal information to commit fraud on tax returns to claim refunds or for other crimes, including:

• Filing a fraudulent tax return using another person’s Social Security number
• Claiming someone else’s children as dependents
• Claiming a tax refund using a deceased taxpayer’s information
• Earning wages under another person’s Social Security number

How does it work?

Crooks look for discarded tax returns, bank records, credit card receipts, Medicare cards and more, often relying on email or telephone phishing, dumpster diving or stealing from your mailbox. They use that info to file for a tax refund before you do. When you file your return later, IRS records will show the first filing and refund, and you’ll get a notice or letter from the IRS.

What can you to do protect yourself?

Reduce tax time stress. File as early in the season as possible, and mail tax returns directly from the post office. If filing electronically, use a secure network and encrypt.

Stay safe online. Do not respond to emails that appear to be from the IRS, and never click on links! The IRS does not send unsolicited, tax-account related emails and never asks for personal and financial information.

Protect your personal information. Never store important account numbers or data in purses or wallets, or on smartphones. Use a shredder for paper documents, and install a locking mailbox.

Monitor your accounts and review financial statements regularly. Sign up for your free annual credit report at www.annualcreditreport.com.

Think you’re a victim of tax ID theft?

Take these four steps right away:

• File a report with the local police.
• Contact your bank and credit card companies. Inform credit bureaus and consider freezing your accounts (a credit freeze restricts access to credit reports, making it unlikely that thieves can open new accounts in your name).
• Contact the IRS Identity Protection Specialized Unit at 800-908-4490 and complete Form 14039.
• Get an IP (Identity Protection) PIN from the IRS so they can verify your identity as they work with you on the theft going forward.