Tax Identity Theft Awareness Week

January 27, 2020 is a big day. It’s National Chocolate Cake Day, Bubble Wrap Appreciation Day, and the ever popular Tax Identity Theft Awareness Day. The IRS has observed Tax Identity Theft Awareness Day since 2014 in an effort to bring awareness to an ever-increasing problem. So, while you’re celebrating with a slice of cake (and popping some bubble wrap), be sure to learn about protecting yourself from identity theft.

It may seem early to start thinking about taxes. The New Year will just be getting underway. But tax identity thieves and IRS imposters are ready for tax season, whether you are or not. As you start gathering documents to prepare your tax return, identity thieves are also at work—trying to beat filers to the punch. And despite IRS efforts to crack down in recent years, it still happens.

What is Tax Identity Theft?

Tax Identity Theft happens when someone uses your Social Security number to file a fake tax return and claim your refund. Employment-related tax identity theft occurs when someone uses your Social Security Number to earn wages, which are then reported as your income to try to trick the IRS into handing over a refund.

IRS imposters are fraudsters who pretend they’re calling from the IRS. They claim you owe taxes and demand that you pay, usually with a gift card or prepaid debit card. They threaten you’ll go to jail if you don’t pay. But if you send the money, it’s gone forever.

How to Protect Yourself

To start fighting tax identity theft, the IRS offers these tips:

  • Protect your Social Security Number throughout the year. Don’t give it out unless there’s a good reason and you’re sure who you’re giving it to.
  • File your tax return as early in the tax season as you can.
  • Use a secure internet connection if you file electronically or mail your tax return directly from the post office.
  • Research a tax preparer thoroughly before you hand over personal information.
  • Check your credit report at least once a year. Make sure no one has opened a new account in your name.
  • Subscribe to the IRS blog posts and fraud alerts to learn about the latest scams and consumer protection issues.

What are the Warning Signs?

If you are a victim of tax-related identity theft, you’ll likely hear about it from either the IRS or your tax preparer. You may be notified if more than one tax return was filed using your Social Security Number. You also will be notified if IRS records indicate you received income from an unknown employer. If you suspect you’re an identity theft victim, continue to pay your taxes and file your tax return. You may have to file a paper return.

What are a Victim’s Next Steps?

If you know or think you’re a victim of tax-related identity theft, the IRS that you:

  • Respond immediately to any IRS notice; call the number provided.
  • Complete IRS Form 14039, Identity Theft Affidavit, if your e-filed return rejects because of a duplicate filing under your Social Security Number or you are instructed to do so.
  • File a complaint with the FTC at identitytheft.gov.
  • Contact one of the three major credit bureaus to place a “fraud alert” on your credit records:
    • Equifax, www.Equifax.com
    • Experian, www.Experian.com
    • TransUnion, www.TransUnion.com
  • Contact your financial institutions, and close any accounts opened without your permission or tampered with by identity thieves.

Staying one step ahead of fraudsters is tricky. New schemes are constantly evolving. The above tips may help prevent or mitigate the damage. So, even though tax season seems far away, it’s smart to start planning now.

DM Studler

DM Studler, M.Acc., CPA, CFF is the founder of SDC CPAs, LLC. and has worked employee dishonesty claims in excess of $82,000,000, both domestic and internationally. She speaks across the country on a regular basis and is highly esteemed among her colleagues.
DM Studler

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DM Studler

DM Studler, M.Acc., CPA, CFF is the founder of SDC CPAs, LLC. and has worked employee dishonesty claims in excess of $82,000,000, both domestic and internationally. She speaks across the country on a regular basis and is highly esteemed among her colleagues.