What is tax identity theft and how does it happen?

By
We are midway through tax season - have you filed your tax return yet? Or has a criminal already filed them for you?

What is tax-related identity theft?

More often referred to as ‘tax identity theft’, tax-related identity theft is when an unauthorized person files a tax return with a stolen social security number in order to obtain a fraudulent refund.

The Internal Revenue Service (IRS) has been beefing up efforts to help stop tax related identity theft. The number of taxpayers who reported they were victims of identity theft dropped 32% in 2016 and 40% in 2017. The amount of refunds protected from those fraudulent returns was $6.4 billion and $6 billion respectively.

How do you know if you are a victim of tax identity theft?

Some signs you are a victim of tax identity theft are:
  • You have been paid by an employer you don’t know. In order for businesses to pay employees, a social security number (SSN) is needed. If someone uses your SSN to get a job, the business will file a W2 that shows what they paid you. When you file your tax return, you won’t include those earnings which will signal to the IRS that you failed to report all your income.
  • Someone might try to file your refund before you do. Since you can only file one tax return for the year filing twice will trigger a red flag for the IRS. You are only allowed to file one tax return per year. (Note: you can amend your tax return and file two years worth of tax returns in one year, but can not file the same return more than once). 
  • You owe additional tax, refund offset, or have had collection actions taken against you for a year you did not file a tax return.
The IRS will send you a notice or letter if there is something wrong with your tax return. However, the IRS doesn’t know these red flags are fraudulent. You have to follow a few steps and protocols to prove your identity has been stolen.

How to deal with tax related identity theft

If you’ve found you are a victim of tax related identity theft you should do the following:
  • Head to the IRS website for the most up to date information on what to do.
  • Report the fraud by filing a police report.
  • Once you’ve filed a police report, file an IRS Form 14039 Identity Theft Affidavit.
  • Don’t stop paying your taxes! Continue to pay your taxes and file your tax return, even if you must do so by paper.
  • Order your credit reports - review the credit reports to see if there has been any activity you do not recognize or cards opened in your name.
  • Contact your financial institutions and inform them your identity has been stolen.
  • Close any financial or credit accounts opened without your permission.
  • Keep track of all paperwork.
  • Put a fraud alert on your credit reports and freeze your credit with the credit reporting companies:
  • Be persistent! 

How do you prevent tax related identity theft?

The key in preventing any form of identity theft is to be vigilant.
  • Don’t give out your SSN unless necessary and you are sure of the identity of the person asking for it.
  • Use strong passwords.
  • Learn what a phishing scam is and how to avoid them.
  • Do not click links or download items that seem suspicious or if you are unsure of the person sharing them with you.
  • Properly dispose of any paperwork that holds your personal information.
  • Keep an eye on your credit report.
  • Freeze your credit if you’ve been a victim of data breach.
The IRS does send letters to start communication or to alert you someone is using your SSN, but the IRS will never:
  • Start communication with taxpayers by email, text, or social media asking for personal information.
  • Demand you pay taxes immediately.
  • Threaten to involve police in order to get you to pay.
  • Demand you pay taxes with specific form of payment (like prepaid debit card).
  • Ask for bank information over the phone.
  • Email you to ask for passwords, SSN, bank information, or other personal information
If you do receive communication via email, text, or social media claiming to be from the IRS, do not reply or click on any links. It may be a phishing email. Instead, forward it to phishing@irs.gov. 

If you aren’t sure if it is truly the IRS, you can always call them yourself!

Stay aware, stay safe!
Free crime alerts at SpotCrime.com!

Comments

Post a Comment

Popular posts from this blog

SpotCrime Weekly Reads: Transparency, gun violence, crime data

By
Image
New police chief promises trust and transparency, better crime data means better crime policy, racial profiling, Boeing criminal charges, family violence, gun violence public health crisis, active shooters targeting public spiked, Biden gun safety law, gun violence, automated license plate readers, gunshot detection software, body cam transparency, California in contempt over prison mental health staffing, and more... POLICE CONDUCT 'Trust, confidence, transparency' — Chatham-Kent gets new police chief  (Windsor Star) This police department's autism unit is saving lives  (Red River Radio) see also:  Alternative 911 Responses Can Build Trust and Improve Outcomes  (Governing) Better Crime Data, Better Crime Policy  (Council on Criminal Justice) Pinellas officers track where people sleep outside ahead of DeSantis law  (Tampa Bay Times) Connecticut Racial Profiling Prohibition Project releases annual report on traffic stops  (Fox61) Boeing should face criminal charges, prosecut
Read more

SpotCrime Weekly Reads: AI, police conduct, transparency

By protector
Image
Police conduct, retired officers back to work, misconduct files released, lack of data stalling cases, association between food insecurity and intimate partner violence, crime victim federal aid drops, crimes against USPS workers, AI in policing, police tech and AI ease workforce woes, WisDOJ sued over police transparency, states that publish current crime data, independent oversight for federal prison system, and more... POLICE CONDUCT N.M. Police Department to Bring Retired Officers Back to Work  (Officer.com) New Louisiana law will criminalize approaching police under certain circumstances  (KGET) Chicago police misconduct files will soon be made public. ‘This is a huge step forward for transparency’  (Chicago Sun Times) A cop gave Fresno man a jaywalking ticket. Then came ‘campaign of hate and revenge’  (Fresno Bee) George Floyd’s murder led to a national reckoning on policing, but efforts have stalled or reversed  (NBC News) L.A.’s dirtiest cop: A mild-mannered traffic officer who
Read more

SpotCrime Weekly Reads: Violent crime, AI tech, transparency

By
Image
Fired cops, police advisory committee, police community relations, traffic stops clogging courts, police discipline records, National Crime Victimization Survey, stranger danger and violent crime, reducing gun crime, stolen guns, rap music used as evidence to convict, AI tool in criminal cases faces legal challenges, AI cameras, drones respond to 911 calls, police transparency in Pittsburgh, police data transparency, dashboards for criminal justice, and more... POLICE CONDUCT The Police Department for Fired Cops  (Illinois Answers Project) New police advisory committee formed after changes from state law  (Fox13Memphis) Using basketball to improve police-community relations and lower gun violence  (The Philadelphia Inquirer) In Memphis, Minor Traffic Stops are Clogging Courts and Draining Resources  (Vera.org) Yonkers PD must hand over police discipline records to civil liberties group, judge rules  (AOL) CRIME RATE National Crime Victimization Survey: Prevalence Estimation Methods  (C
Read more