Identity Theft During Tax-Time: Protecting Yourself

Identity thieves are busy at tax time—find out how to protect yourself.

The weeks before taxes are due on April 15th are busy for all of us—but perhaps even more so for identity thieves. Identity thieves take advantage of opportunities to lift your personal information off financial documents, scam you into answering emails or phone calls from fake IRS agents, and much more.

All identity thieves need are a person's name and Social Security number to do a lot of damage, like opening new credit card accounts or taking out loans. The more information they find, the more harm thieves can do, including accessing your existing bank and financial accounts, as well as filing a tax return in your name to get a fraudulent refund.

In this article you'll learn how to ward off identity thieves at tax time and what to do if you're the victim of tax-related identity theft.

How to Protect Yourself from Identity Theft at Tax Time

Here are five important tips for keeping your and your family's identity safe.

1. Double-Check That Your Incoming Mail Is Secure

An easily accessed mailbox, stuffed with envelopes, is an easy target for thieves. And in the weeks before tax time, they may find a tempting assortment of W-2, 1099, and similar end-of-year statements from your bank, employer, or investment account holders. Buy a locking mailbox, or ask that your statements be sent someplace more secure. And follow up if you don't receive expected paperwork.

2. Choose Your Tax Preparer Carefully

Some tax-preparation outfits are fly-by-night operations that close up shop after your taxes are filed. Not only is that a problem for the accuracy of your taxes, but such outfits are the least likely to guard your documents or shred them before disposal. Cases of tax preparers being the source of identity leaks have been reported.

3. Don't Believe Just Anyone Who Says They're From the IRS

If you receive a supposed IRS email asking for personal or financial information, don't reply, don't open any attachments, and don't click on any links. Forward the email to the IRS at phishing@irs.gov and then delete it. (If you've already clicked on links in a suspicious email or website and entered confidential information, go to the IRS identity protection page.)

The IRS won't initiate contact with you by email, text, or social media channels to ask for personal or financial information. The IRS also doesn't ask for PINs, passwords, or similar confidential access information for credit card, bank, or other financial accounts. If you get a phone call from someone claiming to be from the IRS demanding payment, beware. Your first contact with the IRS about taxes owed would not be a call, but through official correspondence sent through the mail. If you know you owe taxes or you think you might owe taxes, call the IRS at 800-829-1040. An IRS employee at this number can help you with a payment issue.

Also, don't be fooled by links to what looks like the real IRS website—that too may be a fraud. When in doubt, call the IRS at 800-829-1040.

4. Store and Dispose of Your Paperwork Carefully

No matter how relieved you are to be done with your tax filing, sweeping all your leftover documents or draft tax forms into the recycle bin is a recipe for trouble. Identity thieves are notorious dumpster divers. Some have been known to simply drive a car up to someone's front walk, dump their recycling pile into the trunk, and speed off. Also keep your remaining tax and financial documents in a secure place, like a locking file cabinet.

5. File Safely

Filing taxes online is fine, but first make sure you've updated your firewall, antivirus, and anti-spyware software. If you file by mail, take your envelope straight to the post office rather than leaving it in your mailbox for pickup. (For information on protecting yourself from identity theft year-round, see Top Ten Ways to Prevent Identity Theft.)

Recovery Steps After Tax-Related Identity Theft

If someone uses your Social Security number to file a tax return and claim a fraudulent refund, you're a victim of tax-related identity theft. You might find out about this crime when you try to file your return and learn that a return already has been filed. Or, the IRS might send you a letter that says it has identified a suspicious return that has your Social Security number.

If you're the victim of tax-related identity theft, the Federal Trade Commission says you should take the following steps:

  • Go to IdentityTheft.gov to file a report with the FTC and IRS.
  • Contact one of the three major credit bureaus—Equifax, Experian, and TransUnion— to place a fraud alert on your credit records. You should also consider freezing your credit to prevent the identity thief from opening new accounts in your name.
  • Contact your financial institutions. Close any financial or credit accounts that the thief tampered with or opened without your permission.
  • Respond immediately to any IRS notice and call the number provided.
  • Complete IRS Form 14039, Identity Theft Affidavit, if your efiled return rejects because of a duplicate filing under your Social Security number or you're instructed to do so.

If you previously contacted the IRS, but didn't get a resolution, call 800-908-4490. (To find out more about what to do if your identity has been stolen, read Stolen Identity? Take These Recovery Steps.)

Talk to an Attorney

If you need help straightening out your finances, dealing with debt collection agencies, or getting credit bureaus to remove fraudulent information from your credit report after an identity thief opens new accounts in your name, consider talking to a consumer protection lawyer.

If you have tax questions, talk to a tax lawyer.

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