The many media reports of tax fraud over the past few years illustrate the importance of knowing how to protect yourself, to be aware of the warning signs and what steps to take if you are victimized.
The IRS never initiates contact with taxpayers by email, text message or social media; any attempt to contact you in this way is fraudulent. Be especially suspicious of any email asking for personal information or passwords. A common tax fraud method is for criminals to file a tax return in someone’s name, but change the address or bank information so that they receive the refund. When the victim attempts to file a legitimate tax return, it will be rejected as a duplicate.
To help prevent this, apply for an Identity Protection Personal Identification Number (IP PIN) from the IRS at https://www.irs.gov/Individuals/Get-An-Identity-Protection-PIN.
If you believe you are a victim of identity theft or tax fraud, take the following steps:
- File an IRS Form 14039, Identity Theft Affidavit. You will receive a PIN for use in refiling your taxes. See the IRS Taxpayer Guide to Identity Theft at https://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft for more information.
- File an FTC Complaint at https://www.identitytheft.gov. This site also provides additional recovery guidance.
- File a report with the police department. You may need this report for future recovery steps.
- Place a fraud alert on your credit file with one of the three major credit bureaus (Experian, TransUnion or Equifax). You only need to alert one of these companies, as they are required by law to share this information with the other two.
It is also a good idea to request a copy of your credit report from www.annualcreditreport.com and check for any accounts or transactions you don’t recognize. Make ordering a credit report and checking its information part of your annual New Year planning!