In 2013 the IRS paid out $5.8 billion in fraudulent refunds. The IRS suggests the following steps to protect your identity:
- Don’t carry your social security card or other documents that contain your social security number or ITIN (Individual Taxpayer Identification Number);
- Only give out your social security number when required;
- Protect your financial information (shred documents before putting them in the trash);
- Check your credit report every 12 months;
- Review your Social Security Administration earnings statements annually;
- Secure personal information in your home;
- Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches, and changing passwords for internet accounts, and
- Don’t give personal information over the phone, through the mail or on the internet unless you have initiated the contact or you are sure you know who you are dealing with.
Be on guard if you receive a notice from the IRS or your tax professional stating:
- More than one tax return was filed for you;
- You owe additional tax, have a refund offset or have had collection actions taken against you for a year you did not file a tax return;
- IRS records indicate you received more wages that you actually earned; or
- Your state or federal benefits were reduced or cancelled because the agency received information reporting an income change.
Victims of tax related identity theft should:
- File a report with your local police;
- File a complaint with the Federal Trade Commission (FTC) or the FTC Identity Theft Hotline;
- Contact one of the three major credit bureaus (Equifax, Experian, or TransUnion) to place a fraud alert on your account;
- Close any accounts that have been tampered with or opened fraudulently.
If your Social Security Number has been compromised and you know or suspect you may be a victim of tax related identity theft:
- Respond immediately to any IRS notice and call the number provided;
- Complete IRS form 14039, Identity Theft Afidavid;
- Continue to pay your taxes and file your tax return, even if you must paper file; and
- If you previously contact the IRS and did not have a resolution, contact the Identity Protection Specialized Unit.