Find Out if You’re a Tax Identity Theft Victim

How to avoid or respond to tax identity theft: Internet Scambusters #896

The IRS and the US Federal Trade Commission have declared war on tax identity theft scammers.

But it’s an ongoing battle and you could still fall victim to this crime.

In this week’s issue, we explain how to protect your tax identity and what you need to do if you suspect or discover your identity has been used for tax fraud.

Let’s get started…


Find Out if You’re a Tax Identity Theft Victim


Every year, about this time, there’s a surge in identity theft — by the crooks who are trying to get their hands on our tax refunds.

We’ve written many times separately about tax scams and, most recently, Tools and Tips for Your Identity Theft Protection, but the two come together in a scary partnership of crime as we close in on the mid-April tax return deadline.

In an effort to spike the scammers’ guns, the US Federal Trade Commission (FTC) recently launched a new tax identity theft awareness campaign earlier this month.

The agency explains: “Tax identity theft happens when someone uses your Social Security number (SSN) to file a phony tax return and collect your refund. You may not find out about it until you try to file your tax return and the IRS rejects it as a duplicate filing.

“While the IRS investigates, your tax refund can be delayed. The misuse of your SSN means you also may be at risk of other types of identity theft.”

As part of the campaign, there are a series of webinars and other events aimed to help taxpayers spot the tell-tale signs of tax ID theft.

You might have missed it though. Unfortunately, as we reported a few weeks ago, identity theft has become such an everyday thing. And many of us just don’t notice everyday things!

Five Key Actions

Avoiding the scammers is actually a year-round activity because you need to continuously take steps to prevent your personal information from falling into the wrong hands. As regards tax identity theft, the FTC recommends five key actions:

  1. Never give out your Social Security number unless there’s a good reason and you’re sure of who you’re giving it to. Some people, like health practitioners, may need it for billing, but in the main, genuine organizations only request the final four numbers.
  2. File your tax return as early as you can. You may be waiting for W2s, 1099s and so on, but these should have been issued by now. So, don’t wait any longer.
  3. If you plan to file your return electronically, don’t use a public Internet connection. If you don’t have access to a private network, get a form from the Post Office and file it the old-fashioned way — by mail.
  4. If you’re using a tax preparer, make sure they’re trustworthy. If you’ve worked with them previously, they’re probably okay. But if you’re starting anew, seek recommendations from friends or family, or do intensive online research. The IRS provides guidance on finding a preparer in their article: Need someone to prepare your tax return?
  5. Check your credit report at least once a year for free at annualcreditreport.com. Make sure no one has opened a new account in your name.

Are You A Tax ID Theft Victim?

Usually, you don’t find out that you’re a victim of this crime until you either get a letter from the IRS saying they’ve received a suspicious return, or, when you try to e-file your return, it’s rejected as being a duplicate.

Other times, you might receive a “tax transcript” in the mail. If you didn’t order it, then someone else has been using your identity. Or, you might receive a notification that an IRS account has been opened in your name, your account has recently been accessed or disabled, or you owe additional tax based on a return that has been filed.

If you get a genuine IRS alert, it will provide instructions on the steps you need to take to straighten things out. But beware! If the letter contains Internet links you’re supposed to follow (other than irs.gov or another government website), it’s probably a scam.

Scammers are cunning enough to send out this type of fake letter, making it appear genuine and hoping to trick you into revealing confidential financial information.

Likewise, the IRS doesn’t use email or text messages to notify victims of suspicious activity. It always comes by snail mail, so if you get another type of message, you can be pretty sure it’s scam. Nor does the agency make threatening phone calls to people. That’s a scam too.

What To Do If You’re a Victim

The IRS has a Taxpayer Protection Program (TPP) to help victims. When you get your letter or if you know you’re a victim, you’ll need to phone in. A letter may include a toll-free number, but if it doesn’t or you’re suspicious of the one in the letter, the main IRS inquiry number for individuals is 800-829-1040.

If you didn’t get a letter but suspect you’re a victim, you’ll need to download and fill out and file an Identity Theft Affidavit.

Once you get a letter or file your affidavit, a complex process follows. It can take up to six months for the issue to be resolved. You’ll find details of the precise process here: IRS Identity Theft Victim Assistance: How It Works.

The important points to follow are:

  • The need for speed. As soon as you suspect tax id fraud or receive a letter from the IRS, act immediately.
  • Remain constantly on your guard. Don’t click or follow links in messages that seem to come from the IRS.

The FTC has also posted a brief and informative video on tax identity theft: IRS Imposter Scams.

Alert of the Week

You might know that the Windows 7 operating system is no longer being supported by Microsoft.

That means it isn’t being updated, which could leave you dangerously exposed to hackers.

However, don’t fall for emails saying your license has expired and you need to “renew” (and pay for) your Windows license for this or any other reasons.

You can stick with Windows 7 for as long as you like (though we don’t recommend it) without paying. Or you can upgrade to Windows 10 for free (as of this writing) and perfectly legally. See How to Upgrade From Windows 7 to Windows 10 for Free for more information.

That’s all for today — we’ll see you next week.