Recovering from tax-related identity theft can be a frustrating and time-consuming process. However, the IRS can help remove fraudulent, inaccurate information from your federal tax records and make sure that your legitimate return is processed correctly. The key is to address the issue as soon as you realize your identity has been compromised.
Several schemes
Tax-related identity theft can occur in many ways. A thief may steal someone’s Social Security number (SSN), file a tax return, and fraudulently claim a refund. Many thefts occur early in the filing season, so the rightful holders of the SSNs are not aware of the crime until they file their own, legitimate returns.
In another scheme, an identity thief uses a person’s SSN to apply for a job. After the perpetrator starts work, the employer will likely report the employee’s wages to the IRS using the stolen SSN. The rightful owner of the SSN will not know about this until they receive a notice from the IRS — for neglecting to report wages.
Paths to recovery
If you receive an IRS notice stating that more than one return was filed under your SSN, call the number provided. You will likely need to complete IRS Form 14039, “Identity Theft Affidavit.” This form is for victims of identity theft, as well as those whose identity has been compromised in a way that could impact future tax returns (for example, whose wallet has been stolen).
If you do not receive a notice but believe you have been victimized or are at risk for identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490.
Also, depending on where you live, you may receive a “CP01F Notice.” It allows some identity theft victims to obtain unique six-digit numbers, called “IP PINs,” that help prevent misuse of their SSNs on federal tax returns and show that the taxpayers are the rightful filers.
Above all, continue to pay your taxes and file your returns even if you must do so on paper. In addition, remember that the IRS will never ask for personal or financial information via electronic communication, such as email, text messages, or social media.
Bouncing back
Even if you take care to protect your SSN and other personal information, it is possible that your tax identity will be stolen. If this happens, contact us for information about regaining control of it.