Think taxes and you may imagine a totally secure system. Think again. Thieves steal personal information from millions of taxpayers each year, draining billions of federal dollars. The IRS paid out an estimated $5.2 billion in fraudulent identity theft refunds for the 2013 filing season. Another $24.2 billion in phony refunds were detected and prevented. Those numbers mean one thing: you could be in danger.
Here’s How it Works
In one scenario, an identity thief uses your Social Security number to apply for a job. He or she gets back tax documentation and files for a return. You file your taxes and receive notice that more than one return was filed using your Social Security number. Or a fraudster could file for your refund using your Social Security number before you do. Once you file, IRS records will indicate you’ve already received a refund. In both cases, it could be the first clue your identity has been compromised, in some cases long after thieves have acquired your personal information.
How to Prevent it
- Keep your Social Security card and any documents that display the number in a safe place. Don’t carry your card in your wallet.
- Ensure sensitive personal information stored digitally is password protected or encrypted. Install anti-virus protection, keep security software up to date and use smart passwords.
- Check your credit report periodically.
- Only share your SSN when you absolutely must. Don’t offer it on forms or applications when it’s not required.
Help From the Federal Government
The IRS is working to combat identity thieves and protect your information. From 2011 to October 2014, the agency stopped 19 million suspicious returns and protected more than $63 billion in phony refunds. The IRS conducted 1,492 identity theft criminal investigations in Fiscal Year 2014 — a 66 percent increase over the previous year. Indictments and sentencing doubled, with an average prison term of 38 months. The IRS expanded its prevention efforts for the 2014 filing season, assigning more than 3,000 IRS employees to stop refund fraud, investigate identity theft-related crimes and assist taxpayers who have been targeted.
What to do
If a thief strikes, contact the IRS’ Identity Protection Specialized Unit at 1-800-908-4490 to report the fraud and file your return, secure your refund and protect your account moving forward. If someone has stolen your Social Security number to secure a job, his or her income may be reported using your information. Your tax return won’t include those earnings, indicating you failed to report all your income to the IRS. Expect a notice or letter saying you didn’t file a complete report. Watch for unexpected notices from the IRS. If you believe you’ve completely and accurately filed, a letter could indicate someone else has reported income or filed a return using your information. The IRS will contact you via mail; be on alert for other forms of contact. Any emails, text messages, social media messages should be reported to the IRS. Forward emails to phishing@irs.gov, and don’t reply or click links.
