Protect Your Tax Return from Scammers
Tax identity theft is a growing problem where criminals steal personal information to file fraudulent tax returns and claim refunds. Each year, thousands of taxpayers become victims, delaying their refunds and creating a stressful situation.
To keep your personal and financial information safe, this guide will explain how tax identity theft happens, warning signs to watch for, and steps to protect yourself from fraud.
1. What Is Tax Identity Theft?
📌 Tax identity theft occurs when someone uses your Social Security number (SSN) to file a fraudulent tax return and steal your refund.
✅ How Criminals Commit Tax Identity Theft:
✔ Steal personal information through phishing emails, phone scams, or data breaches.
✔ File a fake tax return early in the season before you do.
✔ Claim tax credits and refunds fraudulently in your name.
✔ Redirect the stolen refund to their account or a prepaid card.
📌 Result: When you file your real return, the IRS rejects it because a return was already submitted in your name.
💡 Tip: The IRS does not initiate contact via email or phone—beware of scammers claiming to be from the IRS.
2. Warning Signs of Tax Identity Theft
🚨 Watch out for these red flags that indicate someone may have stolen your tax identity:
✅ Common Signs of Tax Fraud:
✔ Your e-filed tax return is rejected because another return was already filed with your SSN.
✔ You receive an IRS notice for unreported income from an employer you never worked for.
✔ You get an IRS letter about a suspicious tax return you didn’t file.
✔ You receive an Identity Verification Letter (5071C) from the IRS asking for proof of identity.
✔ You stop receiving your Social Security benefits or tax refund unexpectedly.
📌 Example: If you receive a 1099 or W-2 from an employer you don’t recognize, someone may have used your SSN for employment fraud.
💡 Tip: Check your IRS account online to see if a tax return was filed in your name.
3. How to Prevent Tax Identity Theft
📌 Follow these steps to secure your personal and tax information:
✅ 1. File Your Tax Return Early
✔ The earlier you file, the lower the chance a scammer can file in your name first.
✔ Most fraud occurs early in the tax season before real taxpayers submit their returns.
✅ 2. Use an IRS Identity Protection PIN (IP PIN)
✔ An IP PIN is a 6-digit code the IRS assigns to prevent fraud.
✔ Without the IP PIN, no one can file a return under your SSN.
✔ Get an IP PIN at www.irs.gov/ippin.
✅ 3. Protect Your Social Security Number (SSN)
✔ Never share your SSN via email, phone, or text.
✔ Store your Social Security card in a safe place (not in your wallet).
✔ Only provide your SSN when legally required (e.g., for tax forms or financial accounts).
✅ 4. Watch Out for IRS Scams
✔ The IRS will never call, email, or text asking for payment—ignore scam messages.
✔ If you receive a suspicious email, do not click links—forward it to phishing@irs.gov.
✔ Scammers often pose as the IRS to trick taxpayers into providing personal information.
✅ 5. Secure Your Financial Accounts
✔ Use strong passwords and enable two-factor authentication on tax software, bank accounts, and the IRS website.
✔ Check your credit report for fraudulent activity at www.annualcreditreport.com.
✔ Sign up for fraud alerts with your bank and credit bureaus (Experian, TransUnion, Equifax).
📌 Example: If you receive an unexpected tax transcript or refund check from the IRS, a scammer may be testing your account for fraud.
💡 Tip: The IRS never demands immediate payment via gift cards, cryptocurrency, or wire transfers—these are scam tactics.
4. What to Do If You’re a Victim of Tax Identity Theft
🚨 If you suspect tax identity theft, act quickly to limit the damage.
✅ Step 1: Contact the IRS Immediately
✔ Call the IRS Identity Protection Specialized Unit at 1-800-908-4490.
✔ Verify your identity and report the fraud.
✔ Ask the IRS to flag your SSN for fraudulent activity.
✅ Step 2: File Form 14039 (Identity Theft Affidavit)
✔ Complete IRS Form 14039 to report tax identity theft.
✔ Attach a copy of your government-issued ID (driver’s license, passport, etc.).
✔ Mail or fax the form to the IRS Identity Theft Unit.
✅ Step 3: Check Your IRS Account Online
✔ Log in to your IRS account at www.irs.gov/account.
✔ Look for suspicious tax returns, addresses, or bank account changes.
✅ Step 4: Contact Credit Bureaus & Banks
✔ Place a fraud alert on your credit report with Experian, Equifax, and TransUnion.
✔ Monitor your bank and credit card accounts for unusual activity.
✔ Consider a credit freeze if you suspect identity theft beyond taxes.
✅ Step 5: Report the Fraud to the FTC
✔ File a complaint at www.identitytheft.gov.
✔ The FTC helps victims create a recovery plan and dispute fraudulent accounts.
📌 Example: If a scammer uses your SSN to file a tax return, you may not be able to e-file your return and will need to file a paper return instead.
💡 Tip: After reporting tax fraud, the IRS may issue you a special Identity Protection PIN (IP PIN) to prevent future fraud.
5. How Long Does It Take to Resolve Tax Identity Theft?
📌 Resolving tax identity theft can take several months.
✔ The IRS typically processes identity theft cases within 120-180 days.
✔ Refunds may be delayed for up to a year while the IRS investigates.
✔ The IRS will assign a caseworker to help resolve your issue.
💡 Tip: While waiting for resolution, continue filing your tax returns normally using paper forms if necessary.
Stay Safe from Tax Fraud & Identity Theft
📌 To protect yourself from tax identity theft:
✔ File your taxes early before scammers do.
✔ Use an IRS Identity Protection PIN (IP PIN) for added security.
✔ Monitor your IRS account and credit reports regularly.
✔ Be cautious of IRS phone scams, phishing emails, and fraudulent tax preparers.
✔ If you’re a victim, contact the IRS and file Form 14039 immediately.
📌 Need help recovering from tax identity theft? Contact First Union Tax for expert identity theft resolution and tax filing support!
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