Will your tax return be a payday for identity thieves? It very well could. Tax-related identity theft remains one of the IRS “Dirty Dozen” top tax scams. And the 2017 Equifax data breach that exposed the social security numbers of millions of Americans has made it that much easier for identity thieves to get their hands on your hard-earned tax refunds.
The Federal Trade Commission has designated January 28-February 1, 2019 as Tax Identity Theft Awareness Week to help educate taxpayers about this very real and present danger.
Use this Tax Identity Theft Q&A to help you get better informed and protected:
Q: What is tax identity theft?
A: Tax identity theft happens when someone uses your social security number (SSN) to file a fraudulent tax return and steal a tax refund.
There are more identity threats today despite collaboration among businesses to keep a consumer’s information safe:
- Breaches continue to escalate every year which allows criminals to stitch together profiles on consumers. In 2018, IRTC (Identity Theft Resource Center) tracked 1,244 breaches. The records exposed totaled 446.5 million.
- Phishing is on the rise – and the threat can come through email, telephone, or text messages. The Wombat Security reported that 83 percent of their survey respondents experienced phishing attacks in 2018, a 76 percent increase from 2017.
- The IRS received 242,000 reports from taxpayers claiming they were a victim of identity theft in 2017.
Q: Are there warning signs for tax identity theft?
A: Yes. Whether you are being targeted or you’ve already been victimized, there are red flags to watch for:
- You get an email or call from the IRS requesting your financial or personal information. The IRS will never do this – and will always send a letter. This is a phishing expedition by identity thieves.
- You try to electronically file your tax return, and find that a return has already been filed using your SSN.
- You get a letter from the IRS indicating more than one return was filed in your name.
- The IRS records show you received wages from an employer you have not worked for.
- You owe additional tax, have had a refund offset, or have collections against you for a year you didn’t file.
Q: What steps can I take to protect myself?
A: First and foremost, file your tax return as early as possible. This will help you get your tax refund in-hand before tax identity thieves can beat you to it!
- If you e-file, be sure you use a secure internet connection (not from the local coffee shop).
- If you file old-school, mail your tax return directly from the post office (preferably “certified” to enable tracking) to prevent thieves from stealing it out of your mailbox.
- Only share your social security number when required; ask why it’s needed and how it will be protected.
- Don’t give thieves a reason to rummage in your trash. Shred old tax returns and documents you are no longer required to keep (generally after 3 years if not audited).
Q: What should I do if I suspect tax identity theft?
A: Don’t delay! Early detection is critical to minimizing the damage – and it can take an average of 278 days to resolve these complex cases and get your refund.
- If you get an IRS notice in the mail, respond immediately by calling the number provided in the letter.
- If your electronically-filed tax return is rejected because a duplicate has already been filed using your SSN, or the IRS instructs you, submit IRS Form 14039 Identity Theft Affidavit.
- If you did not get a notice from the IRS, but think you are a victim of identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490 immediately.
Identity theft and tax fraud go hand in hand. Use tax season as your reason to start monitoring your credit and other personal data that commands a high price on the black market – and can leave you exposed for years.