How To Protect Yourself Against Tax Identity Theft

Doing taxes is already hard work. But bad people make it even worse! They try to steal your tax money, which is a huge problem nowadays. The bad guys want your personal information like your name, birthday, and Social Security number. They use this info to file fake tax returns. The fake returns say you should get a big tax refund.

The IRS thinks the fake return is real. So they will send your refund to the bad guys! When you try to file your actual tariff return, the IRS says no. Someone already filed a return with your information. This tax identity theft makes a giant mess. Now, you have to deal with the IRS. You might not get your proper refund for over a year! Proving the fraud and getting your money back is super hard.

That’s why you need to protect yourself from tax identity theft description. We don’t want those sneaky tax thieves to steal from you! We will explain easy ways to stop them. Just follow these simple tips, and you will be good to go.

What Is Tax Identity Theft?

Tax Identity Theft happens when the bad guys steal your Social Security number and private information. They use it to make a fake taxation return pretending to be you. On the fake return, they say you should get a big refund.

The IRS believes the fake return is real. They send your refund money to the bad guys instead of you! You don’t even know something is wrong yet.

Then, when you try to file your actual tax return, the IRS says no way! They already got a return with your information on it. What a mess! Right?

Now, you have to deal with the IRS to prove the fake return wasn’t from you, and you can get a refund for tax identity theft. They have to fix everything and send you the right refund. But it takes a really long time, maybe over a year!

You might not get your refund money back for a very long time. That’s why this tax identity theft scam is so bad. It causes huge problems and you would really want to avoid refund tax identity theft if possible!

Who Is At Risk For Tax Identity Theft?

Unfortunately, anyone with a Social Security number is potentially at risk for tax identity theft. Even children and seniors on retirement could be victims. The bad guys buy or steal personal data like names, birthdays, and Social Security numbers. They get this information from shady websites, data breaches, or by tricking people with phishing scams.

People whose taxation information or identities get exposed in data leaks are prime targets. Medical providers, businesses, and schools sometimes get hacked. Employee and patient records full of sensitive data get stolen.

Lower-income individuals are also frequently targeted. Elderly people and those receiving government benefits are at high risk too. Their tariff returns tend to be less complicated for the criminals. These victims may also not notice the theft as quickly.

Pretty much anyone can potentially have their identity stolen for tax fraud purposes. Even if you are very careful, you could get victimized by criminals hacking a company you’ve dealt with.

The younger you are, the more years of risk you will face in the future regarding tax identity theft description. Babies can have their identities stolen to commit tax fraud for over 18 years before it’s discovered! The crooks don’t care who they target either. Your child, parent, or grandparent is just as likely to get hit if their personal data is compromised and exposed.

No one is completely safe from the threat of tax identity theft. The thieves are constantly finding new ways to steal personal information to file fraudulent tariff returns. That’s why it’s so important for every taxpayer to take steps to protect themselves against tax identity theft description. Guard your sensitive data closely and be on alert for any signs of potential identity crimes.

Signs Your Identity Has Been Stolen For Taxes

The first clue is usually when you go to submit your real tax return and the IRS rejects it – saying a return has already been filed using your Social Security number. Uh oh!

Other red flags include:

• Getting IRS letters about suspicious taxation activity or an unfamiliar taxation return submitted
• Finding out your Social Security benefits are being reduced or cut due to alleged income you didn’t actually receive
• Failing to get your expected refund amount
• Receiving taxation documents like W-2s from employers, you don’t recognize

If any of these happen, it’s urgent to contact the IRS immediately about potential tax identity fraud in your name. The sooner you report it, the faster you can start resolving the mess before it gets worse!

How Thieves Use Your Stolen Data For Tax Fraud?

So, how exactly do criminals pull off tax ID theft with your stolen personal info? Their schemes usually follow this pattern:

Obtain Data Illegally

The crooks buy big batches of names, birthdates, Social Security numbers, and other personally identifying details through shadowy online markets. They might hack companies and steal employee records. Or they phish for sensitive data by tricking people into entering it on fake websites.

Create Fake Tax Returns

Using the stolen data, they fabricate realistic-looking taxation return documents filled with made-up income amounts, dependents, credits and more. Their goal is to maximize the refund amount.

File Tax Returns First

Fraudsters try to file these fake returns as early as possible during levy season before actual taxpayers file their legitimate returns. They use legitimate taxpayer info to bypass IRS identity checks.

Reroute Refunds

On the returns, they provide their own bank account or prepaid debit card numbers to receive the refund payments. Sometimes they even obtain an actual address of the victim to receive physical refund checks.

Cash Out Quickly

Once the ill-gotten refunds hit their accounts, the scammers quickly transfer the money elsewhere and cash it out before the IRS realizes the fraud and tries to recover the money.

What a devious con! By the time real taxpayers file, their refund claims get rejected since returns were already submitted in their names. Then, the victims get stuck in lengthy resolution processes to prove their real IDs and reclaim their refunds.

Tips To Protect Yourself From Tax ID Theft

So now that you know how this nasty fraud works, here’s what you can do to stop tariff thieves from ripping you off:

File Tax Returns Early

One of the best defenses is to file your tariff return as early as possible, before criminals can get bogus returns at first using your info.

As soon as you receive all your income documents like W-2s and 1099s, file your legitimate return right away! Be the first one the IRS receives with your real Social Security number.

Better yet, submit returns electronically instead of paper filing whenever possible, as this transmits directly to the IRS computers immediately.

Use Maximum Identity Protection Steps

The next vital step is locking down and guarding your sensitive information very closely. Here are some security tips:

• Get an IRS Identity Protection PIN to add an extra verification layer to your taxation filings each year
• Never carry your Social Security card or documents with your number on them unless absolutely needed
• Invest in a lockable, fireproof box or safe to store your taxation documents and records
• Use strong passwords and two-factor authentication on online accounts
• Avoid carrying around or storing your birth certificate, passport, etc. unnecessarily
• Shred all paperwork with personal or financial data on it before discarding

Watch Out For Phishing Scams

Be extremely wary of any unexpected emails, calls, texts or messages claiming to be from the real IRS. Criminals love to phish for sensitive data they can use to file fake returns.

The IRS does NOT initiate contact by email, text, or social media to request personal info, so do not click links or call numbers in suspicious messages. Hang up on aggressive callers demanding payments over the phone too.

Whenever possible, verify IRS inquiries on the official IRS.gov website or call them directly using verified phone numbers – don’t just trust random contacts!

Use Free Credit Monitoring

Take advantage of free credit monitoring services provided by major bureaus like Equifax, Experian and TransUnion.

These can alert you if someone tries to open bank accounts, credit cards, or loans or if your info gets exposed in a data breach – which are all signs your identity may have been compromised for taxation fraud.

Monitoring your credit reports and scores is an easy way to spot unauthorized activity early on before thieves have a chance to file fake taxation returns in your name.

Keep Anti-Virus Software Updated

Make sure all your devices, like computers, laptops, phones, and tablets, are running active and updated anti-virus protection.

These scan for and can remove viruses and malware designed to steal your personal info off your devices. So always have this protection!

Be Smart On Public WiFi

Never access financial accounts, sensitive info, or taxation documents over unsecured public WiFi hotspots like coffee shops, airports, etc. Here is a guide on how to protect yourself using public WiFi.

Hackers can more easily intercept transmitted data over public WiFi to grab things like login credentials, personal details, and more for levy fraud purposes. Stick to secure private networks when handling sensitive information online.

Watch Mail Closely

Stolen mail is another common way criminals get hold of tariff statements, Social Security cards, and other crucial identity documents for tax fraud.

If you notice any missing mail like W-2s or other tax forms that you expected to receive, flag this immediately. Contact the sender to put a hold on duplicates being mailed out.

Also, opt for paperless delivery of tax documents when possible to reduce how much circulates through the mail system where it can be stolen.

Report Any Suspected Tax Fraud

If you ever spot any warning signs of potential identity theft or tax fraud being committed in your name, do NOT ignore it! Take these steps right away:

• Contact the IRS at 1-800-908-4490 and complete an Identity Theft Affidavit (Form 14039)
• File a report with the Federal Trade Commission online at identitytheft.gov
• Contact your bank and credit card companies to put fraud alerts on your accounts
• Report the theft to your local police department and get a case number

Acting quickly like this can limit the damage and make it easier to reclaim your real refund much faster.

What To Do If Your Tax Identity Is Stolen?

Even if you do everything right, sneaky criminals may still possibly steal your identity and commit tax fraud in your name. If this happens:

• First, try to stay calm and call the IRS Identity Theft Hotline at 1-800-908-4490 right away. Their agents will walk you through the proper steps to take to dispute the fraudulent return.
• Next, you’ll need to complete the IRS Identity Theft Affidavit, Form 14039. This form lets you explain that you were actually the victim of tax identity theft.
• Mail or fax this affidavit along with a copy of your Social Security card and photo ID to the special identity theft unit at the IRS. Make copies for your own records, too.
• You’ll also want to report the fraud to the Federal Trade Commission. They have a special website identitytheft.gov to get an Identity Theft Report and recovery plan.
• Next, contact all your financial institutions about the theft – credit card providers, banks, mortgage and loan companies, etc. Request they place a fraud alert on your accounts and records.
• Getting an extended credit freeze on your reports at all three major bureaus is wise as well. Otherwise identity thieves could continue using your info to open new unauthorized lines of credit.
• While enduring lots of hassles, eventually the IRS will investigate your case and issue you a special PIN to verify your identity on all future tax returns. This helps prevent repeat fraud.

With all these steps, most tax ID theft victims can get their taxation situation resolved within 6-9 months, although some cases take years to fully clear up. Staying patient yet diligent is key!

When To Seek Help From A Pro?

• Multiple fraudulent returns or financial accounts keep appearing in your name
• The IRS case is stalling or denying your legitimate refund repeatedly
• You’re facing potential criminal charges or penalties due to the fraud
• Damage from identity theft has become overwhelming to resolve solo

In many cases, hiring an experienced taxation professional, victim advisor, or even an attorney who specializes in identity theft can take over the efforts and produce faster results.

These pros know all the right protocols, red tape workarounds, resources, and legal tactics to clear your identity and reclaim refunds far quicker. While their services have fees, they often save immense time, money, and hassle versus doing everything alone.

How The IRS Is Fighting Tax ID Theft?

Dealing with tax identity theft is a never-ending battle for the IRS, too. They’ve cracked down hard by:

• Assigning special IRS identity theft units to investigate and assist victims
• Providing special Identity Protection PINs that must get entered on legitimate returns
• Enhancing security filters on taxation software to spot potential fraud earlier
• Working with banks, taxation preparers, and states to verify suspicious returns
• Strengthening authentication processes for accessing IRS tools and systems
• Advocating for tougher penalties for proven tax identity theft perpetrators
• Raising awareness through public education on how to avoid becoming a victim

While taxation identity thieves constantly change tactics, the IRS has caught on to many of their common strategies. This has let them stop millions in fraudulent refunds from being paid out in recent years.

Still, prevention and vigilance by taxpayers remain crucial to avoid needing IRS intervention after the fact.

Tax Identity Theft Victim Stories

Here are real examples of how tax identity theft has impacted everyday people:

Young Mom Targeted

Sarah, a young mother from Milwaukee, went to file her taxation return electronically, but it was rejected. The IRS told her a return had already been filed using her information.

She soon learned someone used her name, birthdate, and son’s Social Security number to file a fake return claiming massive bogus income and refund amounts. All the personal details were shockingly accurate.

Sarah had to provide fingerprints, copies of her Social Security card and son’s birth certificate, and fill out an Identity Theft Affidavit before finally getting her legitimate refund 14 months later. The criminal was never caught.

Senior Fraud Vulnerability

72-year-old Bill from Phoenix was the victim of a data breach at his health insurer where identity thieves stole records. Little did he know that Crooks used his information to claim fake income and credits worth thousands in tax refunds.

The IRS sent Bill a letter stating their records showed he failed to report $92,000 in investment income from the prior year and was being audited. Of course, all his financial accounts showed no such income existed.

Bill got his identity straightened out, but the ordeal took over a year and nearly cost him hefty penalties until everything got dismissed as fraud. He checks his credit reports frequently now.

Employee Data Stolen

Accounting clerk Jane from Seattle had her personnel records stolen when hackers breached her employer’s database. She got a call from the IRS demanding back tariffs for $47,000 in unreported “income,” which was actually phony information used on a fraudulent return filed in her name.

Jane had to explain the tax identity theft, file a report with her local police, and deal with her company and the IRS to sort out the tariff account issues. She eventually got an Identity Protection PIN to use on future tax returns after the lengthy process.

Business Owner Nightmares

Janice ran a small doggy daycare out of her home in Boise. One year later, she found out that her corporate tax refund check had never arrived. After calling the IRS, they confirmed someone had already filed a business tax return using her company info to reroute the $8,500 refund elsewhere.

It took Janice months of working with the IRS, financial institutions, and local authorities to straighten out the identity theft mess. She had to delay paying her staff and nearly went out of business. The thief was never found.

What a headache tax identity theft can be, even for seemingly obvious fraud that shouldn’t be missed! These all-too-common victim stories show why protection steps are so vital.

Stay Proactive To Stop Tax Thieves

Tax identity theft is a growing criminal industry thanks to data breaches and shady info-selling sites online. Once thieves get a hold of your personal info, they can quickly steal your tax refunds and unleash a paperwork nightmare.

But now you know exactly how cunning taxation fraudsters operate to rip people off. More importantly, you’ve got a full game plan of preventative steps to safeguard your identities every tax season:

• File tax returns as early as possible before criminals can
• Obtain an IRS Identity Protection PIN for an extra verification layer
• Lock down sensitive financial info with strong passwords/security measures
• Steer clear of phishing attacks trying to steal your data
• Monitor credit reports for any suspicious activity
• Keep anti-virus software always updated on devices
• Avoid unsecured public WiFi networks when accessing sensitive accounts
• Watch for any missing mail containing taxation documents or ID records
• Report any suspected taxation fraud or identity theft immediately
• Opt for secure electronic taxation filing over paper returns when feasible
• Hire professional help if tax ID theft cases get too complex on your own

By doing things like filing early, enabling IRS identity verification, and routinely monitoring for fraud attempts, you can make yourself a much tougher target for these taxation con artists.

Stay proactive about safeguarding your private information from these sneaky schemes. That way, you can hopefully avoid tax identity theft altogether and keep your hard-earned duty refund money out of the greedy hands of criminals! Let me know if you need any other easy tips on this important topic.

The Bottom Line

Tax identity theft is a nightmarish crime that can wreak havoc on your finances and create mountains of paperwork to untangle. But now you’re armed with all the knowledge needed to stop cunning fraudsters from stealing your identity and swiping your taxation refunds right out from under you.

By taking preventative measures like filing taxation early, getting IRS identity protection PINs, securing personal data, and monitoring for fraud attempts – you form an extremely tough shield against these tax identity theft scammers. Stay vigilant, act quickly if any red flags appear, and take advantage of professional assistance if cases get too overwhelming.

Safeguarding your identities and tax identity theft situations from predatory thieves is well within your control. Implement as many protective steps as possible each year to eliminate your exposure. With some simple proactive habits, you can save yourself immense future headaches and keep blazing a hassle-free path come taxation time!