Don’t Let Criminals Steal Your Tax ID — and Your Refund   

Identity theft’s repercussions

The damage from tax fraud can expand beyond the funds stolen from a person’s tax returns, notes Darius Kingsley, head of Consumer Fraud and Prevention at Chase.

“If I can submit a tax return on your behalf, I have an enormous amount of information on you I can use to commit identity fraud,” he says.

Kinglsey not only educates the public about this kind of fraud; he’s also experienced it himself. “Someone got a hold of my tax return and started an identity takeover on me. They opened up various accounts and credit cards,” he says.

A few ways that scammers try steal your tax ID (and identity)

IRS impersonation: Many tax ID scams involve criminals who pose as IRS employees in order to steal personal information, says Kingsley. They might threaten you with arrest, he adds: “[They] say, ‘unless you cooperate with me immediately, we’re going to arrest you.’ Unfortunately, that can be very effective.”

Fraudulent tax preparers: The IRS warns of  “ghost” preparers — a self-described tax professional who prepares a return but refuses to sign it and/or refuses to include a Preparer Tax Identification Number (PTIN). “When a preparer refuses to sign or provide a PTIN, that is a major red flag,” the IRS notes. “The taxpayer is legally responsible for what is filed.” They can steal your personal information. (Learn how to find a legitimate tax preparer.)

Warning signs

• A notice from the IRS that more than one return was filed using your Social Security number.
• A warning from the IRS that you didn’t declare all of your income, based on wages from an employer or job you do not recognize.
• You get an IRS notice that an online account has been created in your name, and you didn’t create it.
• You’ve been assigned an Employee Identification Number (EIN) that you didn’t ask for.

How to avoid tax ID theft 

• File early: If you’re able, file your tax return as soon as you receive all the necessary documentation. This will help eliminate the opportunity for scammers to file a fraudulent return. (Learn more about why you should file early.)
• Hang up: Government agencies, like the IRS, will not call you to demand urgent action or threaten you. In most instances, they communicate via mail. After you file, check the IRS’s Refunds page for the status of your refund.
• Get to know your tax preparer. Once you’ve verified the preparer’s legitimacy (see above), ask about data security and what they do to protect your information.
• Get an Identity Protection PIN from the IRS. This six-digit code can block someone who has obtained your Social Security number from filing a phony tax return in your name by giving the IRS a second way to verify your identity.
• Keep personal and financial documents secure and shred them when you no longer need them.
• Use security software and keep it updated.
• Use different passwords for online accounts and change them regularly.
• Learn to recognize phishing and impostor emails.
• Don’t give out personal information such as your address, date of birth and Social Security number unless you know who’s asking for it and why.
• Never click links or open attachments in an email unless you are certain of who sent it and why.
• Don’t routinely carry your Social Security card or that of a family member. Ditto for documents containing Social Security numbers. (See other items you should never carry in your wallet or purse.)
• Don’t use a public Wi-Fi network when doing anything online that involves password-protected accounts or personal or financial data.

More resources

If you are a victim of tax identity theft:

• Immediately file a report at IdentityTheft.gov, submit Form 14039 (IRS Identity Theft Affidavit) and notify the IRS.
• Also, freeze your credit with the three major bureaus (Equifax, Experian, TransUnion) to prevent further fraud.
• The IRS has a new scam resource page, with information on identity theft, where to report tax-related scams, and more.
• The AARP Fraud Watch Network has a toll-free helpline (877-908-3360), where trained volunteers provide victims and family members with support and guidance on next steps.