In this digital age, identity theft has become a pernicious and growing problem. Identity theft occurs when someone uses your personal information--such as your name or Social Security number--without your permission, to commit fraud or other crimes.
One of the most rapidly growing forms of identity theft involves the IRS. Identity thieves obtain a victim's Social Security number and use it to file a forged tax return and claim a refund. The fake return is usually filed early in the tax season before the victim files his or her real return. When the victim files a return, he or she discovers that two returns have been filed using the same Social Security number. Unfortunately, the identity thief has already collected a refund from the IRS.
Since 2008, the IRS has identified more than 460,000 taxpayers who have been affected by identity theft.
The IRS is well aware of this problem and is trying stop it. The U.S. Justice Department has conducted massive national sweeps targeting suspected identity thieves. The IRS has also stepped up its internal reviews to spot false tax returns before tax refunds are issued.
How Do You Know If You’re an IRS Identity Theft Victim?
One way is if you receive an IRS notice or letter stating that:
- more than one tax return for you was filed,
- you have a balance due, refund offset, or have had collection actions taken against you for a year you did not file a tax return, or
- IRS records indicate you received wages from an employer unknown to you.
If you believe someone may have used your Social Security number fraudulently, notify the IRS immediately. You will need to fill out the IRS Identity Theft Affidavit, Form 14039.
How to Reduce the Chance of Becoming a Victim
The IRS recommends that you take the following stops to reduce the chance of becoming an identity theft victim:
- don’t carry your Social Security card or any document(s) with your Social Security number on it
- don’t give a business your Social Security number just because they ask; give it only when required
- protect your financial information
- check your credit report every 12 months
- secure personal information in your home
- protect your personal computers by using firewalls, anti-spam/virus software, update security patches, and change passwords for Internet accounts, and
- don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.
If you become the victim of identity theft outside of the tax system--for example, due to a lost or stolen purse or wallet or questionable credit card activity--you should contact the IRS Identity Protection Specialized Unit, toll-free at 1-800-908-4490 so the IRS can take steps to secure your account.