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Taxpayer Identity Theft: How to Detect and Prevent

Taxpayer Identity Theft: How to Detect and Prevent.

Article By : Patrick Mansfield | U.S. Gov Connect
Avoid Tax ID Theft

Taxpayer identity theft happens when another person steals your Social Security number (SSN) and files a federal or state tax return to claim an illegal refund. You might not know that another person claimed a fraudulent return with your SSN until you attempt to electronically file your tax return through efile. You might also receive a letter from the IRS stating that a suspicious tax return was filed with your SSN.

Suspect taxpayer identity theft if the IRS claims you were paid income or wages from an employer/business you don’t know and for whom you didn’t work and in scenarios outlined below.

If You Are a Victim of Tax Payer Identity Theft, The Federal Trade Commission advises that you take the following steps immediately:
  • Contact the Federal Trade Commission (FTC) To File A Taxpayer Identity Theft Claim.
  •  Write the federal credit reporting agencies (Experian, TransUnion, and Equifax) to place fraud alerts on each of your credit files.
  • Contact banks, credit unions, and other financial institutions and demand closure of accounts opened without your knowledge. Check all existing accounts to make sure account funds or credit lines are intact.

Taxpayer Identity Theft and IRS

If you believe your SSN has been used without your knowledge, or believe that you’re a taxpayer identity theft victim, the IRS says you should take these steps:

1. Contact the IRS as required if you receive an IRS notice. 

2. Execute IRS Form 14039 if an efile is rejected. Print the completed form and attach it to your tax return. Follow the mailing instructions.

3. If you are self-employed, continue to pay estimated quarterly taxes. If you're an employee or self-employed, file your annual tax return in paper form if you cannot access the efile system. 

4. Call the IRS at +1-800-908-4490 for help.

Data Breaches and Tax Payer Identity Theft

If your records are compromised in a data breach, learn what type of personal data was acquired:

1. Prepare Form 14039 if your SSN is comprised or if an efiled tax return was identified as duplicated or if the IRS has written to you about taxpayer identity theft.

2. Reduce your risk of taxpayer identity theft by doing everything possible to protect your data:

3. Install a firewall on your computing devices. Use a reliable anti-virus protection program. Create strong passwords for your accounts.

4. Don’t carry your Social Security card in a wallet or handbag.

If you receive an email that’s supposedly from the IRS, know that the Internal Revenue Service doesn’t contact you or your tax professional by email, social media, or text message media.
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