Consumer Handbook: Concerned About Tax Identity Theft? File Early And Consider Using An IRS PIN

Feb 3, 2021


The United States' tax season is here, and so are the scammers. Con artists use the Social Security numbers of unsuspecting Americans to file phony tax returns and steal refunds. 

Here’s how this scam works. Online filers who go through the IRS website usually expect a refund. Instead, a written IRS notice arrives in the mail, stating that more than one tax return was filed using your Social Security number. What happened? Scammers got hold of personal information, typically the account holder's Social Security number, address, and birth date. They filed your return early and received your refund before you even got around to filing. 

Tax ID theft is a particularly sneaky con, because victims typically don’t realize they’ve been targeted until they actually file their taxes. Scammers steal tax information in several ways, such as a phishing scam, a corrupt tax preparation service, or the information was exposed in a hack or data breach. Sometimes tax scammers file in the name of a deceased person or steal children’s identities to claim them as dependents.

The best way to avoid tax identity theft is to file your taxes as early as possible, before a scammer has the chance to use your information.

 

Watch out for red flags. If a written notice from the IRS arrives in the mail about a duplicate return, respond promptly. Or, if an IRS notice arrives stating you received wages from somewhere you never worked, or receive other notices that don’t actually apply to you, contact the IRS office immediately. 

Another big red flag is if you receive a notice that “additional taxes are owed, the refund will be offset or a collection action is being taken against you for a year you did not file a tax return.” Contact the IRS if you have any suspicions that your identity has been stolen. 

Protect your Social Security number. Research your tax preparer to make sure they’re trustworthy before handing over your personal information.

If you are a victim of ID theft, consider getting an Identity Protection PIN (IP PIN). This is a six-digit number, which, in addition to your Social Security number, confirms your identity. Once you apply, you must provide the IP Pin each year when you file your federal tax returns. Visit IRS.gov for more information.