Tax Identity Theft
Tax identity theft has taken a big jump in recent years. Identity theft has been with us for many years, but tax identity theft is beginning to ramp up. Let’s face it, everyone has been required to file for social security numbers or SSNs by the government for many years. It is the way the government keeps track of our taxes and our government benefits. Unfortunately through the years, it has been the way other folks keep track of us. It has been used by doctors, hospitals schools and others to track us and our credit. Though this has slowed down, it has made our SSN’s public information.
Unsavory folks are now using your SSN to claim you tax refunds and other government benefits. It is a form of tax identity theft that works like this. Say an illegal alien uses your SSN to get a job. His employer is required to report that person’s income to the IRS under your SSN. When you file your tax return, you won’t include those earnings. The IRS records will show that you failed to report all your income. The agency will send you a notice or letter saying you got wages but didn’t report them. The IRS doesn’t know those wages were reported by an employer you don’t know. You must contact them to report the problem.
If someone uses your SSN to file for your tax refund before you file, they will get your refund. When you file your return later, IRS records will show the first filing and refund. Instead of the refund, you’ll get a notice or letter from the IRS saying more than one return was filed for you. This type of tax identity theft really hits below the belt. One of the ways to find out if this is happening to you is if you get an unexpected notice or letter from the IRS. This should alert you that someone else is using your SSN. You should respond to the letter immediately to let the IRS know what is happening.
If you get an email from the IRS, don’t answer it, especially if they are requesting personal information. The IRS does not start contact with a taxpayer by sending an email, text or social media and ask for personal or financial information. This type of tax identity theft is called phishing. In case you haven’t heard of it, phishing is when someone sends an email or pop-up message that claims to be from a business or organization that you may deal with — for example, an Internet service provider (ISP), bank, online payment service, or the I R S. This is phishing because the sender is fishing for your personal information and will ask you to “update,” “validate,” or “confirm” your account. If you get an email that claims to be from the IRS, do not reply or click on any links. Instead, forward it to firstname.lastname@example.org.
Dealing With Tax Identity Theft
If you think someone is phishing for your information or has used your SSN to get a job or tax refund, contact the IRS immediately. Specialists will work with you to protect your IRS account from identity thieves in the future. If you are interested in how to save money on taxes, take a look at my Ten Tax Tips.