As Americans continue to file tax returns this month, a staggering number of taxpayers will find out they're the victims of tax identity theft.
"You may not even know that you've been the victim of tax identity theft until you actually file your tax return and it gets rejected because the return has already been filed on your behalf,” said DeAnn Gould-Lancaster, an enrolled agent with H&R Block in Kansas City.
Tax identity theft can happen to anyone. In fact, billions of dollars have been stolen from taxpayers just over the last few years according to the IRS. And it’s not a problem that’s easily fixed.
"It could result in months, even years, of a delay in the IRS resolving that issue for you,” said Gould-Lancaster.
Through a variety of ways, including phishing emails or physical robbery of your social security card, criminals can get ahold of your personal information before fraudulently filing your tax return, stealing your money.
Fortunately the IRS has spent time and resources fighting this type of theft over the past two years, significantly reducing the number of new people reporting stolen identities on federal tax returns by more than 50 percent. During the first nine months of 2015 there were 512,278 new affidavits from people claiming to be victims of identity theft. In 2016, that number was cut down to 237,750.
"A lot of the safeguards that we put into place are behind-the-scenes things. When people file their returns they never really know these things are going on,” said Patricia Russomagno, with the Internal Revenue Service.
Many of the new safeguards being used by the IRS continue to remain confidential so that criminals don’t catch on. But the IRS is confident the numbers surrounding tax identity theft will continue to drop.
The IRS also said if there is a delay with your tax return this year, it may only be because the IRS is using more resources than ever to authenticate returns.
Tips to avoid tax identity theft:
- Never carry your Social Security card in your wallet/purse
- Don’t click on ‘phishy’ emails
- Shred documents
- Use reputable software/CPA
- Use security software with firewall/anti-virus
- Use strong passwords
It’s also important to know that the IRS will never initiate a call or email a taxpayer regarding payment. They will only call if they have previously been in touch with that taxpayer beforehand.
More from the IRS on tax identity theft:
What is tax-related identity theft?
Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund.
You may be unaware that this has happened until you e-file your return and discover that a return already has been filed using your SSN. Or, the IRS may send you a letter saying we have identified a suspicious return using your SSN.
Know the warning signs
Be alert to possible tax-related identity theft if you are contacted by the IRS or your tax professional/provider about:
More than one tax return was filed using your SSN.
You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return.
IRS records indicate you received wages or other income from an employer for whom you did not work.
How to report a scam
Report suspicious online or emailed phishing scams to: phishing@irs.gov. For phishing scams by phone, fax or mail, call 1-800-366-4484. Report IRS impersonation scams to the Treasury Inspector General for Tax Administration’s IRS Impersonation Scams Reporting.
