Tax-Related Identity Theft – Beware of This Season-Specific Type of Fraud

As you prepare your 2014 federal income tax return this spring, watch out for a growing problem: tax-related identity theft. With this type of crime, identity thieves use stolen personal information, such as Social Security numbers, to file forged tax returns and collect fraudulent tax refunds.

It’s the season

Tax-related identity thieves usually strike early in the tax filing season. This often enables them to collect fraudulent refunds before their victims have filed their legitimate tax returns. Unfortunately, taxpayers usually don’t find out that they’ve been victimized by a tax identity thief until they receive notice from the IRS that:

  • More than one tax return was filed using the taxpayer’s Social Security number,
  • The filer was paid by an employer unknown to the agency,
  • The taxpayer has a balance due or refund offset, or
  • Collection actions were taken against the taxpayer for a year when he or she didn’t file a tax return.

If you receive such a notice, contact the IRS Identity Protection Specialized Unit right away at (800) 908-4490. You’ll be required to complete and submit an IRS Identity Theft Affidavit (Form 14309) and send a copy of proof of your identity, such as your driver’s license, Social Security card or passport. Keep a record of the dates on which you made any calls to the IRS, as well as copies of any correspondence with the IRS.

Other steps you might consider taking include filing a police report, putting a fraud alert on your credit report, and filing an identity theft complaint with the Federal Trade Commission.

Protecting yourself

The best way to guard against becoming a victim of tax-related identity theft is to carefully guard your Social Security number and other personal information. Here are a few tips:

  • Don’t carry your Social Security card in your wallet or purse — instead, keep it in a secure location at home or in a safe deposit box.
  • If a business asks for your Social Security number, ask them why they need it, and provide it only if there’s a legitimate business reason.
  • Check your credit report at least once a year by ordering a credit report through a reputable provider.

Vigilance required

Don’t be a victim of tax-related identity theft. Now is the time to be especially vigilant in protecting yourself from this crime.

© 2014