Tax-related identity theft is a prevalent issue that could affect anyone. It can result in severe consequences, as the stolen personal details can be utilized to file a fake tax return and receive an unlawful refund. Moreover, your Social Security number and other personal information can be used for fraudulent activities without your knowledge.
To prevent such incidents, investing in a reliable identity theft protection service that caters to your specific needs is crucial. However, if your tax information is stolen, you must know how to spot the signs of identity theft, particularly in your tax affairs. Though the IRS may notify you of any suspicious activity, it's always better to watch for anything suspicious and inform the IRS of any such activity.
What is identity theft?
The IRS has provided a useful checklist of indicators to watch out for if you suspect that your identity has been stolen. The list starts by advising you to be cautious if you receive a letter from the IRS concerning a tax return that you did not file. You may also find that you are unable to file a tax return online because your Social Security number is already in use in the IRS system.
Other indicators could be that you receive a tax transcript in the mail that you did not request, or you receive a notification from the IRS that a new online account has been created in your name. Additionally, you might receive a notification from the IRS about activity in an online account that you did not access, raising concerns about potential fraudulent activity.
Furthermore, you may receive an IRS notice indicating that you owe additional tax or that a refund offset has been applied. Alternatively, it may reveal that collections have been taken against you for a year when you did not file a tax return. Another warning sign is if IRS records indicate that you have received wages or income from an unknown employer. Fortunately, the IRS offers helpful instructions on how to take action if you become a victim of identity theft.
You tax return
If you think that you have been a victim of tax-related identity theft, it is important to take quick action. In case a fraudster has already filed an application for your tax refund, it is crucial to work with the IRS to make sure that your genuine return gets processed speedily. Sometimes you may realize that you have been a victim of identity theft only when your return gets rejected because someone else has already filed using your Social Security number. This can happen whether you have e-filed or gone via the paper filing route. You may not receive a letter from the IRS stating that it suspects fraudulent activity has occurred, which is why it is important to always remain watchful.
IRS Form
If you suspect that someone else has filed a tax return using your Social Security number, you need to fill out Form 14039 to inform the IRS. This will help you explain to the IRS that someone else has used your personal details which may have affected your tax account.
The form requires you to provide information about the affected tax year and the last tax return you filed before the identity theft occurred. Once you have completed the form, you need to mail it to the IRS along with a copy of your Social Security card, driver's license, or other government-issued identification like a US passport or military ID. If the IRS has already been in contact with you, include any correspondence you have received from them regarding the suspected fraudulent return.
A time to investigate
Once the IRS receives the necessary information, they will investigate the issue and remove the fraudulent return from your taxpayer account. Furthermore, a unique Identity Protection PIN will be generated for the affected taxpayer and added as a special marker in their account. This additional measure ensures that a tax return cannot be filed without the corresponding IP PIN, providing an extra protection layer. It's important to remember that no matter your level of online activity, everyone needs protection against identity theft. The best identity theft protection services are designed to prevent criminal activity and alert you of any suspicious activity. However, knowing what steps to take if your tax filing activities are compromised is crucial.
Victim assistance
The IRS has a handy website page outlining Identity Theft victim assistance. It outlines how the IRS Taxpayer Protection Program can often identify a suspicious tax return, which means that the revenue service will contact you first.
Remember that if you have grounds to be suspicious or, for example, your e-filed return is rejected because of a Social Security number duplication, then you’ll need to contact the IRS yourself.
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