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How to Avoid Falling Prey to Tax Fraud

Man and woman looking through papers to illustrate tax fraud
September 30, 2016

What is tax filing fraud?

Tax filing fraud (or tax-related identity theft) occurs when someone uses your stolen Social Security number (SSN) to file a tax return in your name in order to claim a refund. Victims are often unaware that this has happened to them until they file their tax return only to discover that a return already has been filed using their SSN. Or, the IRS may send them a letter saying they have identified a suspicious return using their SSN.

What You
Should Know

You can be a victim of tax filing fraud if someone steals your SSN to file a tax refund claim.

What You
Can Do

Keep your SSN private and report any suspicious tax-related emails to the IRS.

Know the warning signs of tax fraud

Be alert. If you are contacted by the IRS or your tax professional/preparer about any of the following, you may be the victim of tax fraud:

  • More than one tax return was filed using your SSN
  • You owe additional tax, incur a refund offset, or have had collection actions taken against you for any year you did not file a tax return
  • IRS records indicate you received wages or other income from an employer(s) for whom you did not work
45% of all FTC complaints in 2015 were related to tax fraud.1

What to do if you become a victim of tax fraud

The Federal Trade Commission (FTC) recommends these steps:

  • File a complaint with the FTC at identitytheft.gov.
  • Contact any of the three major credit bureaus to place a “fraud alert” on your credit reports:
    • Equifax
    • Experian
    • TransUnion
  • Contact your financial institutions to let them know and ask them how the problem could affect your accounts

If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:

  • Respond immediately to any IRS notice
  • Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return got rejected because of a duplicate filing under your SSN or you are instructed to do so
  • Continue to pay your taxes and file your tax return
  • If you previously contacted the IRS and did not have a resolution, contact them for specialized assistance at 1-800-908-4490
In 2016, there was a 400% increase in phony tax-related emails pretending to be from the IRS.2

How to reduce your risk of tax fraud

To avoid becoming victim of tax fraud, keep your identity and personally identifiable information (PII) safe by:

  • Always using computer and mobile device security software with firewall and anti-virus protections.
  • Creating strong passwords
  • Learning to recognize phishing emails, calls and texts from thieves posing as legitimate organizations such as your bank, credit card companies and even the IRS
  • Not clicking on links or downloading attachments from unknown or suspicious emails
  • Protecting your personal data at all times
  • Knowing that IRS does not contact taxpayers by email or electronic channels to request personal or financial information

To report possible tax fraud

Report suspicious online or emailed phishing scams to phishing@irs.gov or by phone at 1-800-366-4484.

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