Tax time is sometimes a time of dread, if you're getting ready to file and/or are worried you'll have a bill to pay; or more likely, it's a time of joy, if you're one of the three-quarters of Americans who are lucky enough to get money back, and are deciding what to do with that extra money. A little Spring getaway? Pay off a credit card bill? Or replace that old, clanking washing machine, maybe?
But for some very unfortunate Americans, tax time is when they find out that they've fallen victim to identity theft. You might find out your identity has been stolen if you receive a letter from the Internal Revenue Service (IRS) stating that:
- They have already received a tax return for your Social Security Number (SSN).
- You have a balance due or are being taken to collections for a year in which you did not file.
- You have unreported wages from an employer that you have not worked for.
With tax identity theft, the thief uses a legitimate taxpayer's SSN and fraudulently files a tax return to claim a refund early in the filing season. Thieves can also get a job using your SSN.
If you get a letter like one of those described above, contact the IRS' Identity Protection Specialized Unit at 1-800-908-4490 immediately. Since tax season is a time of IRS impersonation schemes, and you receive a letter but suspect it may be a scam, it is best contact the IRS directly.
Identity theft protection experts recommend filing early in the year and use the electronic service to file. This will catch any problems quickly, and you can take the necessary steps to report and resolve the issue.
The best way to avoid this hassle is to by following the steps below for identity theft protection and to minimize your chances of tax identity theft:
- Know that the IRS never contacts taxpayers by email, social media, tweets, text messages. If you receive such a communication, forward it to firstname.lastname@example.org.
- Do not carry your Social Security card or any documents containing your SSN.
- Shred documents containing personal information instead of just throwing them in the garbage.
- Do not give out your SSN to businesses. When asked for it, ask why it is needed, how it will be safeguarded and if there is an alternate form of identification that could be used.
- Check your credit report at any of the three major credit reporting agencies, Equifax, Experian and TransUnion, regularly.
- Protect your identity online using firewalls, anti-spam/virus software, update security patches and change passwords regularly.
- Never give out personal or financial information over the phone, by mail or Internet unless you are absolutely sure you can trust who you are dealing with. Be sure to only share personal data on secure websites.
- If your wallet has been stolen, or you know that you have been a victim of identity theft.