Tax Related Identity Theft
On January 28, 2016, the U.S. Federal Trade Commission (FTC) reported that it tracked a nearly 50 percent increase in identity theft complaints in 2015, and that by far the biggest contributor to that spike was tax refund fraud.
An identity thief may use your Social Security number to get a tax refund or a job. Contact the IRS if they send you a notice saying their records show:
- You were paid by an employer you don’t know
- More than one tax return was filed using your Social Security number
Then, visit IdentityTheft.gov to report and recover from identity theft.
How It Works
If someone uses your SSN to file for a tax refund before you do, the IRS might think you already filed and got your refund. When you file your return later, IRS records will show the first filing and refund, and you’ll get a notice or letter from the IRS saying more than one return was filed for you.
If someone uses your SSN to get a job, the employer may report that person’s income to the IRS using your SSN. When you file your tax return, you won’t include those earnings. IRS records will show you failed to report all your income. The agency will send you a notice or letter saying you got wages but didn’t report them. The IRS doesn’t know those wages were reported by an employer you don’t know.
How To Protect Yourself
File your taxes as soon as possible. Unfortunately, many companies delay the process of mailing out W2 forms that taxpayers need to complete their filings, while fraudsters are already at work. By filing as early as possible, you reduce the chances that someone will falsely file under your name before you file your legitimate return.
Also, if you use online tax preparation services, please pick a strong password and do not use a password that you also use at another site or service.