If you tried to electronically submit your tax return and the IRS kicked it back noting that you had already filed a return, you might be the victim of tax-related identity theft. Don’t panic but do immediately contact the IRS and plan to file a paper return as well as any payments due on time. Also, follow the IRS’s instructions for reporting the tax identity theft and consider contacting the Federal Trade Commission (FTC) and credit reporting bureaus.
What is Tax Identity Theft?
Tax-related identity theft is a little different from other forms of identity theft. Rather than using your Social Security number (SSN) and other personal information to apply for a credit card, the thief uses your data to file a tax return claiming a fraudulent refund.
According to the FTC, tax identity theft soared during the pandemic. Reports of this type of theft rose from 27,450 cases in 2019 to 89,390 cases in 2020, a 225% increase. The FTC noted the numbers began to rise with the emergence of federal stimulus payments. (Although officially an advance on a tax credit, these stimulus payments were issued to taxpayers in the form of checks and direct deposits.) Unfortunately, these payments opened a world of opportunity for cyber thieves to steal taxpayers’ SSNs and either divert stimulus check payments to a false mailing address or a wrong account.
How To Know if You Are a Victim
In addition to finding out you are victim when the IRS rejects your online return because one has already been filed using your SSN, you might be an identity theft victim if:
- The IRS sends you a letter about a suspicious tax return you did not file.
- You cannot file your tax return because of a duplicate Social Security number.
- The IRS mails you a tax transcript you did not request.
- You get an IRS notice that an online account that you have not set up was created in your name.
- The IRS sends you a notice that your existing online account has been accessed or disabled when you took no action.
- The IRS sends you a notice that you have an unpaid tax bill for a year you did not file taxes.
- IRS records indicate you were paid wages or other income by an employer you didn’t work for.
- You have been assigned an employer identification number (EIN) you did not request.
What to Do if You Are a Victim
If you are the victim of tax identity theft, the IRS is prepared to assist. Here are steps to take:
- Respond to the IRS immediately. If you receive an IRS notice with a contact phone number, use that number.
- Complete Form 14039, Identity Theft Affidavit. Print and attach the form to your tax return and then mail it to the appropriate address.
- Report the identity theft to the FTC, which will record the theft and provide you with a personal recovery plan.
- Complete Form 4506-F, Identity Theft Victim’s Request for Copy of Fraudulent Tax Return and mail or fax it to the IRS.
- Mail in a paper return and pay your taxes.
These steps will help you solve your tax identity theft issue, but they do not relieve you of your responsibility to file a tax return and pay your tax bill by the deadline. Make sure to include the appropriate identity theft form and mail your return along with your payment to the IRS. Do not continue to attempt to file electronically.
How To Protect Yourself from Tax Identity Theft
Going forward, it’s important to protect yourself against tax identity theft. One way to do so is to request an identity protection (IP) PIN. Until 2021, only victims of tax-related identity theft could request an IP PIN. At the beginning of the year, the IRS made these available to all taxpayers. An IP PIN is known only to you and the IRS and is valid for one year.
Remember, the IRS will never initiate contact with you through a phone call, email, text, or social media. The IRS initiates communications via the mail.
Have Questions? Call the Experienced Tax Attorneys at Wiggam Law
If your tax identity has been stolen, we can help. The experienced attorneys at Wiggam Law can evaluate your situation and recommend a course of action. Contact metro Atlanta’s top tax attorneys by clicking here or giving us a call at (404) 233-9800.