Tax ID Theft Awareness

Jan 8, 2014 by

tax ID theft logoTax-related identity theft has exploded. Its most common forms are:

  • Someone files a tax return with the IRS using your name and Social Security number. The numbers are all made up, but the bottom line is a fat refund. The scammer gets the refund and you get a confused letter from the IRS when you file your legitimate return.
  • Someone provides your Social Security number when he or she takes a job. Again the IRS is confused when your tax return does not reflect the income reported to it by the employer you know nothing about.

Ka-BOOM Goes Tax ID Theft

According to Reuters, about 1.6 million Americans were tax refund ID theft victims in just the first half of 2013. That’s about 400,000 more than the 1.2 million victims in all of 2012. You see the trend here.

Message From the FTC on Tax Identity Theft

Never let it be said I shirked my civic duty. (Personal responsibilities, household chores, and legal obligations—yes—but civic duty—no.) As we head into tax season and Tax ID Theft Awareness week, the remainder of this post is an article provided by the FTC on tax identity theft. Be aware or be square!

Have You Heard About Tax Identity Theft?

Ready for tax season? If you haven’t heard about tax identity theft, you may not be.

Tax identity theft happens when someone files a phony tax return using your personal information — like your Social Security number — to get a tax refund from the IRS. It also can happen when someone uses your Social Security number to get a job or claims your child as a dependent on a tax return. Tax identity theft is the most common form of identity theft reported to the Federal Trade Commission. The IRS says tax identity theft is a top priority and says it has hired new staff, explored new technologies, and adopted new procedures to fight it.

For these reasons, I am participating in Tax Identity Theft Awareness Week, along with other federal, state, and local officials and law enforcement agencies. Here’s what you can do to lessen the chance you’ll be a victim:

  • File your tax return early in the tax season, if you can.
  • Use a secure internet connection if you file electronically, or mail your tax return directly from the post office.
  • Shred copies of your tax return, drafts, or calculation sheets you no longer need.
  • Respond to all mail from the IRS as soon as possible.
  • Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail.
  • Don’t give out your Social Security number (SSN) unless necessary.
  • Research a tax preparer thoroughly before you hand over personal information.
  • If your SSN has been compromised, contact the IRS ID Theft Protection Specialized Unit at 1-800-908-4490.
  • Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name. [You can and should get your report once per year for free from each reporting bureau. That’s three free credit reports per year! Shazaam!  You’re welcome, Kurt]

What if you’re a victim? Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or IRS records show they received wages from an employer they don’t know. If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

More information about tax identity theft is available from the FTC at http://www.ftc.gov/idtheft.

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  • Color Me Frugal

    Great tips. I used to be pretty relaxed about giving out my SSN (well, I guess not “relaxed,” but I thought I HAD to fill it in when asked on forms). Now I never fill it in unless I know it’s a need-to-know situation like for the IRS, my employer, etc. It is sort of annoying that so many places that require you to complete info sheets for them still have a box for it- as most people assume that they HAVE to complete all the boxes on any form they are given. For example, I was recently seen at a hospital I had never been seen at before and there was a box to put in SSN. Why do they need it? They are not my employer. They do not need to report my earnings to the IRS. I am sure most people just blindly fill it in. Scary!

    • The university I attended used SSNs as the student ID number–embossed on every student’s ID card! Of course that was back before Al Gore invented the Internet… 🙂

  • I have read about tax refund theft before. Main thing is to protect your SSN, file your tax forms as soon as you can, and check your credit report. I spread that out to checking one of the credit bureaus every 4 months on annualcreditreport.com.

    • Excellent suggestion on the credit report check Bryce, thanks. Many people don’t realize that the right to one free credit report per year applies to each of the three reporting bureaus.

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