Tax Identity Theft Part III: 7 Steps for Making Identity Protection Part of Your Routine

In 2016, the entire tax industry joined together to enact new safeguards and actions in an effort to combat tax-related identity theft. Many of these will be invisible to you but are invaluable tools used to help fight against these criminal syndicates.

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. However, identity theft can occur in a variety of forms including stolen personal data such as your name, address, bank account numbers and even children’s names. 

You may be unaware it has even happened until filing your tax return only to discover one has already been filed using your SSN! You might also see suspicious charges on a credit card or begin receiving bills for goods or services you never purchased.

The theft of your identity can be traumatic, frustrating and often costly. In our increasingly digital world, it’s important to always be on guard.

Here are seven steps you can make part of your routine to protect your tax and financial information:

  1. Read your credit card and banking statements carefully and often – watch for even the smallest charge that appears suspicious. (Neither your bank or the IRS will send you emails asking for sensitive personal and financial information such as asking you to update your account.)
  2. Review and respond to all notices and correspondence from the Internal Revenue Service. Warning signs of tax-related identity theft can include IRS notices about tax returns you did not file, income you did not receive or employers you’ve never heard of or where you’ve never worked.
  3. Review each of your three credit reports at least once a year. Visit annualcreditreport.com to get your free reports.
  4. Review your annual Social Security income statement for excessive income reported. You can sign up for an electronic account at www.SSA.gov.  
  5. Read your health insurance statements; look for claims you never filed or care you never received.
  6. Shred any documents with personal and financial information. Never toss documents with your personally identifiable information, especially your social security number, in the trash.
  7. If you receive any routine federal deposit such as Social Security Administrator or Department of Veterans Affairs benefits, you probably receive those deposits electronically. You can use the same direct deposit process for your federal and state tax refund. IRS direct deposit is safe and secure and places your tax refund directly into the financial account of your choice.

Steps to take if you become a victim

  • If you are a victim of identity theft, the Federal Trade Commission recommends these steps:
  • File a complaint with the FTC at identitytheft.gov.
  • Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:
  • Contact your financial institutions, and close any financial or credit accounts opened without your permission or tampered with by identity thieves.

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:

  • Respond immediately to any IRS notice; call the number provided or, if instructed, go to IDVerify.irs.gov.
  • Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return rejects because of a duplicate filing under your SSN or you are instructed to do so. Use a fillable form at IRS.gov, print, then attach the form to your return and mail according to instructions.
  • Continue to pay your taxes and file your tax return, even if you must do so by paper.

For additional information about Tax Identify Theft, please visit www.irs.gov/identitytheft.