Tax Identity Theft

What is Identity Theft?
According to the IRS, "Individual identity (ID) theft is 'a fraud that is committed or attempted, using a person’s identifying information without authority.'"

Individual ID theft may involve stealing someone’s Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN), name, bank account, or credit card numbers, and using that information without permission. Some ID theft starts with something as simple as someone stealing a wallet or accessing your mail.

The IRS Website says Tax-related ID theft can affect you in two main ways

1. Someone uses your (stolen) identification information to file a fraudulent tax return to obtain a refund.
2. Someone uses your (stolen) information to obtain employment, which can make it seem like you had more income than you earned.

I would add a third since it is rampant: Unemployment Identity Theft.

​How do you know if you are a victim of Tax Identity Theft?

Oftentimes you first discover it when you try to file your tax return and it gets rejected. The IRS or State rejects the return because it has already received a return using your SSN or ITIN or even one of your dependent's SSN.

The next biggest way is you start getting letters from the IRS or from your state (or even another state). The letter may say you did not claim all your income on your return. It may show wages from somewhere you never worked or unemployment for which you never applied.

Sometimes you will get a letter from the IRS or the state saying more than one tax return was filed using your SSN or ITIN.

Another way you may be notified by the IRS or a state is a letter saying an online account has been created in your name or your existing online account has been accessed (and you know it was not you) or completely disabled.

Another indicator? You receive a letter stating balance due, refund offset notice, or have collection actions taken against you for a tax year when you didn't file a return or receive a refund.

Finally, a notice from the Social Security Administration (SSA) stating benefits will be reduced or stopped because IRS records indicate you received wages or other income from an employer for whom you did not work.

There are some uncommon indicators as well. You or your child does not receive financial aid for college or a lessor amount because of the amount of income that the IRS reported.

​What To Do If You Are A Victim of Tax Identity Theft

The processes for fixing the theft can be overwhelming and long, but they are not impossible. First know there is a lot of help available to you. The IRS and each State has links on their website for what to do. You need to know that each state has their own individual process you need to follow.

The IRS provides help not only through their website but through a Specialized Unit.
Identity Protection Specialized Unit
Toll-free phone number: 800 908-4490
Hours: Monday through Friday 7:00 a.m. to 7:00 p.m. local time (Alaska and Hawaii use Pacific Time)

The list the IRS provides shows what to do if this happens to you. You can search Identity Theft Guide or here is a direct link:
Identity Theft - Taxpayer Advocate Service (irs.gov)

Their suggestions include:
​Make a police report;
In every situation, fill out a Form 14039, Identity Theft Affidavit with the IRS;
Mail in your return (with the Form 14039) if it was rejected for efile;
If you didn't file a return, call the IRS the toll-free Identity Verification line at 800-830-5084; 
​If a letter comes from Social Security, contact the SSA to find out how to correct your Social Security account;

Other actions you can take to protect yourself if your identity may have been stolen?
The IRS has these suggestions:

• Contact the Social Security Administration (SSA) to verify and correct any wage discrepancies on your SSA account;
• Contact your financial institution;
• File a report with your local police department;
• Check your credit report every 12 months by:
  • visiting annualcreditreport.com, or
  • Calling 877-322-8228
• Place a fraud alert on your credit reports;
• File a complaint with the Federal Trade Commission;
• Contact your state Attorney General’s office; and
• Contact your state tax agency to see if there are additional steps you should take at the state level.

One last word. Many Tax Resolution Specialists offer services to help you with these processes. If your wages get garnished for something to do with Identity Theft, they can help.