Tax identity theft is a genuine concern. Every year, millions of fake tax returns are filed. The Federal Trade Commission (FTC) receives thousands of tax identity theft complaints. The IRS loses massive sums of money to these scammers.
To prevent these types of scams during tax season, the IRS regulates Tax Identity Theft Awareness Week every year. As a result, there was a noticeable decrease in fraudulent tax returns filed!
The data of the past three years from 2017-2019 shows us that fraudulent activities have decreased during tax season.
Unfortunately, the scenario told a different story last year.
Why should you consider tax identity theft seriously?
Tax identity theft is a crime that occurs when thieves or imposters want to steal your tax refund to file an income tax return in your name. These imposters get your information from legitimate sources. By using your data, they create fraudulent W-2s and other forms to get the tax refund.
How do fraudsters commit tax identity theft?
Hopefully, you are now aware of how imposters scam you over the phone or steal your information to file a fraudulent return.
Watch out for these 7 signs of tax fraud to avoid long-term hassles.
- You receive a tax form (W-2) or 1099 form from an unknown employer.
- The IRS may show that you received wages from an employer you don’t know.
- You receive a letter from the IRS requesting information verification.
- You cannot file a tax return because someone has already filed one using your name and social security number.
- The Internal Revenue Service (IRS) is calling you to demand payment or personal identity information.
- The IRS shows that you owe money, but you don’t know how.
- The IRS tells you that they can involve law enforcement to get the money you owe.
What should you do if you are a victim?
Taking action after you understand that you are a victim of tax identity theft is crucial. Here are a few things you can do to avoid becoming a victim of tax identity theft.
- You should contact the IRS as soon as possible. Call 1-800-908-4490 to get assistance from the IRS.
- Reply immediately to any notice you receive from the IRS to manage the situation.
- Submit IRS Form 14039, Identity Theft Affidavit. You can find the form on the IRS website. After filling out the form correctly, print it. Mail this form along with your paper return to the IRS.
- Contact the FTC and file a formal complaint at identitytheft.gov.
Initiate a fraud alert on your credit report. Contact the three major credit reporting agencies:
- Equifax – visit the official website or call 800-525-6285
- Experian – visit the official website or call 888-397-3742
- TransUnion – visit the official website or call 800-680-7289
How can you protect yourself from tax identity theft?
Get an Identity Protection Personal Identification Number (IP PIN)
The IRS assigns a six-digit number (IP PIN) to taxpayers. This IP PIN helps the IRS to verify authentic taxpayers. Without an IP PIN, scammers cannot file a tax return in your name.
To get an IP PIN, register with the IRS.GOV. To sign up for an IP PIN, you need to provide an email address, one financial account number under your name, SSN, tax filing status, and a mailing address. For more information on signing up for an IP PIN, check out this post.
Know how to protect your personal information
- You should not send important information via email or text. Remember, the IRS never sends emails or texts to taxpayers. You may receive messages or emails that look legitimate and request your personal information. Don’t open or reply to spam messages or emails.
- Avoid sending your SSN, residential address, or birth date via email or text message to people you don’t know.
- Don’t respond to any calls asking for bank details, name, birth date, or other personal information.
- Don’t click on any links you receive via emails or text messages.
- Avoid carrying your social security card.
- Use a secure Internet connection when you’re accessing financial information.
- Never use public Wi-Fi hotspots to file your online tax return.
- Make sure you install a good anti-virus software on your computer.
Consider legitimate help
Tax identity theft can take a toll on your savings. If scammers get your personal information, they can also steal money from your bank account. They can use your data to open credit card accounts or loans in your name. They can also access your online bank accounts or credit card portals. You need to be aware of identity theft to avoid financial problems.
Tax authorities require representatives to be licensed as a CPA, attorney, or Enrolled Agent in order to provide their services to taxpayers.
At Lifeback Tax, our staff includes CPAs, attorneys, and EAs. We work together in order to exhaust every option possible for our clients. Our team specializes in tax relief, therefore every staff member is trained rigorously on the tax code and IRS negotiations. We also service clients in all 50 states as we have staff certified on both state and federal levels! If you’re being weighed down by the burden of debt, look no further. Call us today at (855) 605-1500 for your FREE first consultation, no obligation required.
Patricia Sanders is a financial content writer. She is a regular contributor to debtconsolidationcare.com. Her passion for helping people stuck in financial problems has earned her recognition and honor in the industry. Besides writing, she loves to travel and read various books.