Tax-Related Identity Theft: Signs and Countermeasures

by | Mar 3, 2020 | Cybersecurity

What could be worse than filing your taxes for the year and finding out that you unexpectedly owe money to the government? Getting a notice from the IRS saying that you already filed your return—when you haven’t yet. 

Identity thieves are always looking for opportunities to impersonate you to make purchases, open credit cards in your name, apply for loans, and—at this time of year—file returns in your name to steal your refund.

We sincerely hope that your identity never gets stolen, but if it ever does, it’s important to recognize the signs as soon as they happen. Doing so will help you limit the damage an identity thief can do.

Signs you are a victim of tax-related identity theft:

  • You receive an IRS letter saying there’s been a suspicious tax return filed with your SSN
  • Your filing gets rejected because there’s a duplicate filing using the same SSN (While the IRS website can reject your electronic filing, they will never initiate contact with you by email, text, or another electronic message. The IRS sends notices in the mail. The rest are scams.)
  • A tax transcript that you didn’t request arrives in the mail
  • You receive other IRS notices in the mail (for online account changes you didn’t make, for additional owed taxes, for collections against you for a year you did not file a return, for wages from sources you don’t recognize, etc.)

Other signs of general identity theft

  • You see charges you don’t recognize on your bills
  • You get phone calls or bills for items or services you didn’t purchase
  • You’re missing regular bills or other mail
  • Your credit report shows strange accounts
  • Your credit card gets unexpectedly denied

What should you do if you suspect your identity has been stolen?

  • Visit immediately (recommended by the FTC, CISA and IRS)
  • Still file your tax return, even if it’s necessary to mail a paper return
  • It may be necessary to contact credit reporting agencies and file reports and forms such as Form 14039, Identity Theft Affidavit.
  • Limit potential damage by putting a fraud alert on your credit report, closing all new accounts opened in your name (as listed in your credit report), and freezing your credit
  • If you’re a victim of a data breach, follow up with the company to see what information was stolen and what they’re doing to protect you

It is time to start practicing good habits when it comes to protecting your information. A few ways to do that could be through enabling two factor authentication (2FA) for your accounts, creating better passwords, or even hiring an MSP to help protect and monitor your business’s information from theft.

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