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Protect Yourself from Tax Identity Theft

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Tax Identity Theft

Tax identity theft occurs when someone uses your Social Security number (SSN) or other personal information to file your taxes. While tax-related identity theft is less common than other types of identity theft, it can cause serious headaches and can take time to resolve. To reduce your risk of becoming a victim, it’s a good idea to be aware of the warning signs and take the necessary precautions to protect your personal data.

Warning Signs of Tax-Related Identity Theft

Often, you don’t realize that you’ve been the victim of tax-related identity theft until you receive a notice from the tax authorities. But there are also clear signs, such as

  • Receiving a letter from the Internal Revenue Service requesting an unfiled tax return.
  • A tax return cannot be submitted electronically due to a duplicate SSN.
  • You receive a notification that an IRS account has been opened online in your name.
  • You receive a tax return that you did not order.
  • Receiving an Employer Identification Number (EIN) that you did not request.
  • Receiving a notification from the IRS that an existing online tax account has been deactivated, updated, or accessed, but you have not logged in.

Income and payroll documents from employers you have never worked for in the past or currently are also signs that you may be a victim of tax-related identity theft. This is a clear sign that someone is abusing your SSN.

What to do if you are a victim?

If you are a victim of tax-related identity theft, there are several steps you can take to remedy the situation and protect your financial accounts.

  1. Respond immediately to a notice/letter from the IRS and call the number listed.
  2. If your electronic record is denied due to a duplicate SSN, complete Form 14039 (Affidavit of Identity Theft). You can fill it out online and print it to attach to your tax return. Be sure to follow all instructions on the form when submitting it.
  3. Go to IdentityTheft.gov and file a complaint. If you file a complaint, you will receive a list of steps to take to protect yourself during recovery.
  4. 4 Contact the three major credit bureaus (Equifax, TransUnion, and Experian) and file a fraud alert for your account. Additionally, you should review your report. If you notice any new credit accounts that have not yet been opened, contact the creditor immediately and close the account.

If you think someone has filed a false tax return under your name and SSN, you can also get a copy of that return. To do this, complete Form 4506-E, Request for Copy of a False Tax Return. The form can be sent by mail or fax.

  • If by mail – Department of the Treasury, Internal Revenue Service, Fresno, CA 93725.
  • If by fax – attach a cover sheet marked “Confidential” and send it.

The IRS will acknowledge your request within 30 days of receipt and generally send you a follow-up letter or a copy of your tax return within 90 days.

Tips for protecting your data and personal information

The IRS has put together some helpful tips to minimize the risk of tax-related identity theft.

  • Always treat data like cash and don’t leave it lying around.
    • Always lock cell phones and computers, even if they are only minutes away.
    • Install security software with automatic updates.
    • Use encryption software to protect sensitive data.
    • Use unique and secure passwords, not the same password for all accounts.
    • Use multi-level authentication whenever possible.
    • Secure files.
    • Provide personal and financial information only on encrypted websites (HTTPS).
    • Beware of phishing scams through emails and text messages.

All taxpayers whose identity has been verified may also receive an identity protection PIN. This six-digit number is used to protect your SIN when filing your tax return.

The tax authorities will not ask you for your financial information or identity protection PIN via email, text message, or social media. If someone calls you claiming to be the IRS and threatening jail or legal action, hang up immediately – this is a scam.

Ask for outside help

If you would like to discuss a reasonable refund plan, filing an amended tax return, or other tax savings opportunities, consult a corporate tax advisory nyc.

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