Updated Dec. 7, 2023
According to the FTC, since the pandemic, tax-related identity theft has risen 45% since the pre-pandemic years. And by May of 2023, the IRS had already flagged more than 1 million returns for potential identity theft. Imagine this: You work hard to file your tax return, only to find out that your Social Security number has already been used to file taxes! Or perhaps you receive a notice from the IRS, stating that another online account has been created in your name. Tax identity theft is prevalent, and it can happen to anyone—even you.
When you are filing your taxes, you want to be able to focus on filling out the right information and getting it done as accurately as possible. What you don’t want to think about is tax identity theft. What is it, how does it happen, and how can you avoid falling victim to it yourself?
What is tax identity theft?
Tax identity theft happens when a scammer uses your personal information, like your Social Security number (SSN), to pretend to be you as they file a fake tax return. This way, they can receive your tax refund instead of you.
You may also be scammed out of your money if the thief pretends to be the IRS and calls you on the phone. They can threaten you with arrest or some other serious consequence if you don’t pay what you owe—but if you pay what they are asking for, the only consequence is that a scammer receives your money.
How can tax identity theft occur?
Some tax identity thieves are opportunists. They may swipe your mail when you’re not looking. If you’ve received some pre-approved credit card offers or sensitive bank statements, they can easily find your SSN. Another way they can find your info is by hacking your online accounts. Perhaps they’ve gained access to your log-in credentials; once they gain access to your accounts, they can access your SSN as well.
If you file your taxes late, scammers have more time to pose as you and file a false return. They can also easily hack into your accounts if you choose to file using unprotected Wi-Fi, like your favorite coffee shop. Sometimes identity thieves discover your personal information in the trash if you don’t thoroughly shred your sensitive documents.
Who is at risk of becoming a victim of tax identity theft? The U.S. Department of Justice states that “everyone with a Social Security number is potentially vulnerable to having their identity stolen.”
How to protect yourself from tax identity theft
Though there is no sure-fire way to prevent identity theft, you can still take a few proactive steps to help keep the less motivated ID thieves at bay.
- When filing online, use a secure Wi-Fi network. You could also use a Virtual Private Network to be even safer.
- File as soon as you can to avoid giving thieves time to mishandle your personal information.
- Filing by mail? Drop off your tax return at the local post office or in an official mailbox, instead of leaving it in your home mailbox.
- Were you expecting your tax return documents, but have not found them yet? That could be a sign that a thief swiped them before you got to them in your mailbox.
- Immediately shred or burn sensitive documents that you no longer need, instead of throwing them into your trash intact.
- Don’t trust emails, texts, or phone calls that claim to be from the Internal Revenue Service. The IRS will always contact you by official letter first.
What to do if you are a victim of tax identity theft
If you can’t find your tax return, get an IRS alert that your taxes have already been mysteriously filed, or think you fell victim to a scam message, don’t panic. You have quite a few steps to take to start fixing this problem.
- Did the IRS officially contact you? Respond as soon as possible using the number they provide for you in their letter.
- Did your SSN already get fraudulently used to file taxes? You can complete a Form 14039, Identity Theft Affidavit, which allows you to submit details of your tax identity theft to the IRS. You can either submit it online or physically mail it once completed.
- IdentityTheft.gov is a helpful resource that offers steps for you to take if you believe you have fallen victim to tax identity theft.
Ways IDShield can help
Discovering that your identity has been stolen can make you panic. But IDShield is here to assist! We take your identity seriously and provide essential identity monitoring and restoration services.
- Access credit monitoring, cybersecurity, device protection, instant alerts and more to give you peace of mind.
- If your identity is stolen, we connect you with Licensed Private Investigators who will do whatever it takes for as long as it takes to restore your identity to its pre-theft status.
- You can receive up to $3 million for certain identity fraud expenses and legal costs as a result of a covered identity fraud event.
Download our IDShield app to start protecting what matters today!
Pre-Paid Legal Services, Inc. (“PPLSI”) provides access to identity theft services through membership-based participation. IDShield is a product of PPLSI. All Licensed Private Investigators are licensed in the state of Oklahoma. The information available in this blog is meant to provide general information and is not intended to provide professional advice, render an option, or provide any specific recommendations. The blog post is not a substitute for competent and professional advice. Information contained in the blog may be provided by authors who could be third-party paid contributors. All information by authors is accepted in good faith; however, PPLSI makes no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of such information.
