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 has been the most common form of identity theft reported to the Federal Trade Commission (FTC) for the past five years.
Tax identity thieves get your personal information in a number of ways. For example:
- Someone goes through your trash or steals mail from your home or car
- Imposters send phony emails that look like they’re from the IRS and ask for personal information
- Employees at hospitals, nursing homes, banks, and other businesses steal your information
- Phony or dishonest tax preparers misuse their clients’ information or pass it along to identity thieves
So what can you do about it? To lessen the chance you’ll be a victim:
- File your tax return early in the tax season, if you can, before identity thieves do
- Use a secure internet connection if you file electronically. Don’t use unsecure, publicly available Wi-Fi hotspots at places like coffee shops or a hotel lobby
- 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 first contact you by mail.
- Don’t give out your Social Security number (SSN) or Medicare number unless necessary. Ask why it’s needed, how it’s going to be used, and how it will be stored.
- Get recommendations and 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 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
What if you are 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 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 800-908-4490. Visit IdentityTheft.gov, the federal government’s one-stop resource to help you report and recover from identity theft. You can report identity theft, get step-by-step advice, sample letters, and your FTC Identity Theft Affidavit. These resources will help you fix problems caused by the theft.
More information about tax identity theft is available from the FTC at ftc.gov/taxidtheft and the IRS at irs.gov/identitytheft.
Unfortunately, tax identity theft isn’t the only way scammers are targeting taxpayers. The FTC has gotten thousands of complaints about IRS imposters who claim people owe unpaid taxes and will be arrested if they don’t pay up. They may know all or part of your Social Security number, and rig caller ID to make it look like it’s really the IRS calling. Before you can investigate, you’re told to put the money on a prepaid debit card and tell them the number — something no government agency would ask you to do.
If you owe — or think you owe — federal taxes, call the IRS at 800-829-1040 or go to irs.gov. IRS workers can help you with your payment questions. The IRS doesn’t ask people to pay with prepaid debit cards or wire transfers, and doesn’t ask for credit card numbers over the phone. When the IRS contacts people about unpaid taxes, they usually do it by postal mail, not by phone. Report IRS imposter scams to the Treasury Inspector General for Tax Administration (TIGTA) online or at 800-366-4484, and to the FTC at ftc.gov/complaint.