What You Need to Know About Tax-Related Identity Theft

Let’s face it—tax season can be stressful. Gathering all your important documents and trying to maximize your deductions can be a daunting task for even the most organized financial planners. Factor in the possibility of tax-related identity theft, and you’ve got a recipe for some very real anxiety.

But don’t fret. Though tax-related identity theft is a serious situation, there are steps you can take to help prevent it and/or mitigate the damage if it happens to you.

What is Tax-Related Identity Theft?

Tax-related identity theft is when someone uses stolen personal information—e.g., your Social Security Number—to file a tax return and collect your refund before you can. Even worse, if an identity thief has already filed a fraudulent return in your name, it’s possible that they might also use your personal information to access your accounts, apply for credit cards, or take out loans. 

How Can I Protect Myself from Tax-Related Identity Theft?

As of 2021, the IRS has expanded its tool to protect against tax-related identity theft: the Identity Protection Personal Identification Number, a.k.a. IP PIN to all individuals who would like to enroll in the program. An IP PIN is a six-digit number assigned to you for one calendar year to prevent identity theft by allowing the IRS to verify your identity when you file. 

If you want to sign up for the IP PIN Opt-In Program, just register at IRS.gov and use the online get an IP PIN tool. If you can’t register online, you may be able to receive an IP PIN number via mail.

After verifying your identity, the IRS should send you an IP PIN number through the mail within 3 weeks. To learn more about IP PIN visit the IRS website. 

How Can I Tell if I’ve Been a Victim of Tax-Related Identity Theft?

There are a few signs to watch out for. Someone may have filed a fraudulent tax return in your name if:

• You receive a notification from the IRS via mail inquiring about a suspicious tax return that you did not file.

• Your tax return is rejected when you try to file online due to a duplicate SSN.

• You receive a tax transcript in the mail that you did not request.

• You receive a notification that an IRS account has been opened in your name.

• IRS records indicate that you received wages or other income from an employer you did not work for.

Remember: the IRS will never contact you via calls, emails, text messages, or social media to request personal information or threaten you with lawsuits or arrest. Any communication of this kind is a scam designed to prey on tax-related anxiety.

What to do if You’re a Victim of Tax-related Identity Theft?

The IRS recommends you act immediately if you know your Social Security Number has been compromised or you suspect that you may be a victim of tax-related identity theft..

Visit identitytheft.gov for immediate steps to protect yourself and your financial accounts.