Even if you guard that critical 9-digit number carefully, you can still have a fraudulent tax return filed using it.
Your first thoughts when you become the victim of a tax identity thief might go along the lines of:
Tax identity theft simply means that someone got your Social Security number and filed a fraudulent return with it, claiming a refund. You would probably find out about it when you got a letter from the IRS stating that your Social Security number was used to file more than one return. Or you owe more tax than you thought you did. Or a return came in using your Social Security number, claiming wages from an employer who wasn't yours. [MORE] . . .
Learning you are a victim of identify theft can be a stressful event. Identify theft is also a challenge to businesses, organizations and government agencies, including the IRS. Tax-related identify theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund.
Mary time, you may not be aware that someone has stolen your identify. The IRS may be the first to let you know you're a victim of ID theft after you try to file your taxes.
The IRS combats tax-related identify theft with a strategy of prevention, detection and victim assistance. The IRS is making progress against this crime and it remains one of the agency's highest priorities.
Here are ten things to know about ID Theft:
1. Protect your records. Do not carry your Social Security card or other documents with your SSN on them. Only provide your SSN if it's necessary and you know the person requesting it. Protect your personal information at home and protect your computers with anti-span and anti-virus software. Routinely change passwords for Internet accounts.
2. Don't Fall for Scams. The IRS will NOT call you to demand immediate payment, nor will it call about taxes owed without first mailing you a bill. Beware of threatening phone calls from someone claiming to be from the IRS. Even if you have reason to believe you owe taxes, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at (800) 366-4484.
3. Report ID Theft to Law Enforcement. If your SSN was compromised and you think you maybe the victim of tax-related ID tax theft, file a police report. You can also file a report with the Federal Trade Commission using the FTC Complaint Assistant. It's also important to contact one of the three credit bureaus so they can place a freeze on your account.
4. complete an IRS Form 14039 Identity Theft Affidavit. Once you've filed a police report, file an IRS Form 14039 Identify Theft Affidavit. Print the form and mail or fax it according to the instructions. Continue to pay your taxes and file your tax return, even if you must do so by paper.
5. Understand IRS Notices. Once the IRS verifies a taxpayer's identify, the agency will mail a particular letter to the taxpayer. The notice says that the IRS is monitoring the taxpayer's account. Some notices may contain a unique Identify Protection Personal Identification Number (IP PIN) for tax filing purposes.
6. IP PINs. If a taxpayer reports that they are a victim of ID theft or the IRS identifies a taxpayer as being a victim, they will be issued an IP PIN. the IP PIN is a unique six-digit number that a victim of ID theft uses to file a tax return. In 2014, the IRS launched a IP PIN Pilot program. The program offers residents of Florida, Georgia and Washington, D.C. the opportunity to apply for a IP PIN, due to high levels of tax-related identify theft there.
7. Data Breaches. If you learn about a data breach that may have compromised your personal information, keep in mind not every data breach results in identify theft. Further, not every identify theft case involves taxes. Make sure you know what kind of information has been stolen so you can take the appropriate steps before contacting the IRS.
8. Report Suspicious Activity. If you suspect or know of an individual or business that is committing tax fraud, you can visit IRS.gov and follow the chart on How to Report Suspected Tax Fraud Activity.
9. Service Options. Information about tax-related identify theft is available online. The IRS has a special section of IRS.gov devoted to identify theft and a phone number available for victims to obtain assistance.
10. Help. You may find a competent CPA is your best friend when faced with Identity Theft and your taxes.