Tax identity theft is one of the biggest hassles you can face during tax season. Yet it happens way too often—especially early in the year, because that’s when scammers like to get a jump on filing bogus tax returns. Their goal is to get illegal tax refund checks by using other people’s social security numbers.
So even if you aren’t yet ready to prepare your income taxes, you should know that January 13-17 is the Federal Trade Commission’s Tax Identity Theft Awareness Week. Chances are, you’ll never become aware of tax ID theft until you try to file your own tax return and it gets rejected by the IRS (since your social security number or your dependent’s social security number has already been used).
If this situation occurs, get ready for a few weeks or even a few months of hassles and extra paperwork. But there is a way to conquer the problem. Here are four steps to take when someone uses your social security number to file taxes.
Step 1: Fill out the right IRS form
If someone has used your Social Security number (or your child’s social security number) to file an income tax return, you first need to alert federal authorities as soon as possible and advise them that you have been the victim of identity theft.
Begin by filling out IRS Form 14039, an Identity Theft Affidavit, which tells the IRS that someone has already fraudulently used your Social Security number—or that you suspect you may be a potential victim of fraud.
This Form 14039 lets you advise the IRS of any incidents that are currently impacting your taxes, as well as any incidents that could impact your taxes in the future.
Ironically, you will have to provide proof of your own identity, by supplying the IRS with documentation such as a passport, driver’s license, social security card, or another federal or state-issued government ID card.
Yes, it’s a pain. But it’s also worth it to help clear up the matter.
Send these documents via mail or fax:
Internal Revenue Service
P.O. Box 9039
Andover, MA 01810-0939
FAX: (Not toll-free)
Step 2: Call the IRS if you have questions or info they should know
Since the IRS has to handle millions of these cases annually, the agency has a created a special division to deal with situations where someone has stolen another person’s social security number and used it to file an income tax return.
The IRS department to call for help is the IRS Identity Protection Specialized Unit (toll free) at 800-908-4490.
You should call them if you have specific questions, such as when your refund might arrive. You should also contact them if you have details or facts they should know related to the illegal use of your social security number.
Step 3: Notify the credit bureaus
To deal with this issue of someone stealing your social security number or falsely filing taxes in your name, you should also put a credit freeze and a credit alert on your credit reports.
You can do a credit freeze with any of the big three credit reporting agencies: Experian, Equifax or TransUnion.
A credit freeze will help prevent someone from opening accounts in your name or taking out loans using your social security number. If either of these happens, now you have even bigger financial problems to confront.
Step 4: File a police report when necessary
Lastly, if your purse or wallet was stolen or someone seems to have misappropriated your personal data—such as your social security card/number, or driver’s license, etc.—you need to immediately file a police report with your local police department.
Hopefully, who ever did this will be caught. If you don’t know who did it, and want to find out, read my advice here: Who Stole Your Social Security Number or Identity? 4 Steps To Find Out Who Did It!
But if you do know who did it, and it was a family member or a friend—a situation that occurs far more often than you might think—I would confront that person and issue this ultimatum. This is especially helpful advice for anyone whose credit has been wrecked by a relative who committed identity theft.
Unfortunately, most people are mostly in the dark—at least at first—about their social security being misused.
The way most people ultimately find out about someone else using their social security number is when an individual files his or her taxes, and gets a notice or letter from the IRS indicating that a tax return has already been filed or stating that you received wages from some employer that you never had.
Any such letter is a big red flag that you’ve probably been the victim of identity theft.
Do take the steps outlined above, because someone fraudulently using your social security number could get a tax refund check, block you from getting your own taxes filed in a timely manner, or delay you in a legitimate refund. Additionally, the identity thief could get anything from credit and loans to a job or government benefits using your name and/or social security number. So put an end to that mess as soon as possible.
Tax Identity Theft Affect Millions
If you are the victim of tax identity theft, you are not alone.
Each year, more than 10 million Americans are struck by identity theft, which has been the top consumer complaint to the FTC for 13 consecutive years. Furthermore, tax-related identity theft is sharply on the rise.
In 2010, tax identity theft comprised just 15% of the FTC’s identity theft complaints from consumers. But in 2012, tax identity theft accounted for more than 43% of all identity theft complaints, making it by far and away the largest category of identity theft complaints.
To help combat the problem, and to educate consumers, the FTC is hosting 16 events across the country, along with a series of national webinars and Twitter chats designed to raise awareness about tax identity theft.
The 16 Tax Identity Theft Awareness Week events hosted by the agency will be held in cities in Alabama, California, the District of Columbia, Florida, Georgia, Maryland, Nevada, New York, Ohio, South Carolina, Texas, Washington and Virginia. Various events will include representatives of the IRS, AARP and local U.S. Attorneys’ offices, who will provide additional information to consumers.