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.
One way is if you receive an IRS notice or letter stating that:
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.
The IRS recommends that you take the following stops to reduce the chance of becoming an identity theft victim:
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.