Tax-related identity theft is a big issue and one that has the potential to affect anyone. The fallout from such an event can be a major issue too, as your stolen personal information could be used to file a tax return and claim a fraudulent refund. Your Social Security number and other personal details could be used for other fraudulent reasons too and this might happen without you knowing about it initially.
Of course, it’s prudent to ensure that you have taken measures to get the best identity theft protection in place before you do anything else. Picking the right package to suit your needs and requirements will help to tackle the wider issue of ID fraud, and the top identity theft protection services are a great place to start. However, this article takes a look more specifically at what you need to do if your tax information is stolen.
It’s a very good idea to spend a little bit of time finding out how to spot the telltale signs of identity theft, especially if it pertains to your tax affairs. The IRS will usually inform you if it’s already happened, but there are plenty of things to look out for in order to stay ahead of the game. It may be that you’ll want to let the IRS know of any suspicious activity instead. It can work both ways.
The IRS has a handy checklist of things to look out for if you suspect identity theft has taken place. It kicks things off by advising you to be wary if you get a letter from them about a tax return that you didn’t file. You may also find you’re prevented from e-filing a tax return because there’s a duplicate of your Social Security number present in the IRS system.
Other issues could be that you get a tax transcript in the post that you didn’t ask for, or there’s a notice from the IRS that a new online account has been created in your name. You could also find that the IRS notifies you about activity in an existing online account, highlighting potentially fraudulent activity if you didn’t access it yourself.
On top of that, you may get an IRS notice indicating that you owe additional tax or refund offset. Alternatively, it may flag up collections taken against you for a year that you might not have filed a tax return. Another alarm bell is if IRS records indicate that you have received wages or income from an employer you didn’t work for. Thankfully, the IRS has plenty of helpful advice on how best to take action if you are a victim of identity theft.
Naturally, if you suspect you’ve been a victim of tax-related identity theft then you’ll want to get on top of the problem as soon as possible. If you’ve got a fraudster that’s going after your tax refund then it’s vital to work with the IRS in order to ensure your genuine return gets processed swiftly.
You might find that the first time you know about identity theft is when your own return is rejected if someone has already filed using your Social Security number. This can happen if you’ve e-filed or if you’ve gone via the paper filing route. You might, however, not get a letter from the IRS stating that it suspects fraudulent activity has taken place, which is why it’s important to remain vigilant.
In order to let the IRS know if you think another tax return has been filed using your Social Security number you’ll need to complete its Form 14039. This allows you to indicate to the IRS that you think someone else has been using your details, which have subsequently affected your tax account.
Along with giving the IRS details on what you think has happened, you’ll be required to give information about the tax year affected as well as the last tax return that you submitted before the identity theft took place.
Once you’ve filled in Form 14039 you’ll need to mail it to the IRS and provide them with a copy of both your Social Security card and driver’s license. A US passport, military ID or government-issued identification card will also be suitable for this. Be sure to include any correspondence you’ve received from the IRS if it has already written to you about a potential fraudulent return.
Once it has the relevant information the IRS will investigate the issue and clear the fraudulent return from your taxpayer account. The IRS will often add a special marker alongside the account, which subsequently generates an Identity Protection PIN specifically for the taxpayer that has been affected by the fraudulent activity.
The benefit of this action is that it means a return cannot be filed without the accompanying IP PIN, therefore adding another level of protection. And protection is what you need whatever your level of online activity. Remember that the best identity theft protection packages are excellent at fending off criminal activity and also alerting you to it. However, it’s also vital to know what you’ll need to do if your tax filing activities are hijacked.
The IRS has a handy page on its website that outlines Identity Theft victim assistance. It outlines how the IRS Taxpayer Protection Program can often identify a suspicious tax return, which will mean that the revenue service will get in touch with you first.
Remember though that if you have grounds to be suspicious or, for example, your e-filed return is rejected because of a Social Security number duplication then you’ll need to contact the IRS yourself.