Tax Identity Theft: How To Tell If You’ve Been Ripped Off When Filing Your Tax Return

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Identity theft is all around us. Click on a webpage or watch the news, and chances are another identity theft or computer security breach story is in the headlines. It’s no different when it comes to taxes; an identity thief somehow gets your social security number (SSN) and files a fraudulent return. You’re the last person to find out until it’s time to file your tax return. Here’s how to tell if you’re a victim of tax identity theft:

  • You file your tax return and are notified that a return in your name has already been filed.
  • You receive a notice from the IRS informing you of their records show two tax returns under your name.
  • You receive a notice of wages earned from an employer you don’t know and for whom you never worked.
  • You receive a notice that you have a balance due, a refund offset, or that collection actions have been initiated by the IRS against you.

If you’re holding one of those notices in your shaking hands, it’s hard to clear your head and to figure out what’s next. Identity theft can destroy your credit, put you on the hook for accounts in your name that aren’t yours, and make you liable for purchases you didn’t make. Let’s not forget the impact on your ability to file a tax return.

What You Need to Do

First and foremost, contact the IRS immediately. If they were the one to initiate contact with you regarding identity theft, respond as soon as you receive the notice. Call the number provided on the notice.

You or your tax representative will need to complete the IRS Identity Theft Affidavit form. From there you’ll be assigned a specialized PIN to access your tax information and confirm your identity with the IRS while you work to prove that you are in fact the rightful owner of the social security number used to file the return.

As with any identity theft scenario, there is bad news: it can take up to a year to clear your name with the IRS, and the burden of proof is on you to prove that you are the legitimate taxpayer and the true owner of the social security number, not the thief.

The good news is that the IRS takes identity theft seriously and has put in place screening measures to weed out fraudulent attempts at filing a tax return.

In the meantime, continue to file your tax return on paper.

If you have contacted the IRS regarding a fraudulent tax return filed in your name and didn’t receive satisfactory resolution to your case, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

Identity theft is frightening. After all, some random person has your confidential financial information and is opening accounts and filing tax returns with it.

As with any identity theft case, file a police report, close any accounts that were fraudulently opened in your name, file an FTC complaint, and notify all three credit bureaus so they can place a fraud alert on your credit records.

  • Equifax: 1-800-525-6285
  • Experian 1-888-397-3742
  • TransUnion 1-800-680-7289

Tomorrow: how to reduce your risk of identity theft.

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