No one enjoys filing taxes, but the annual, unavoidable task can become infinitely less
fun if you become the victim of tax identity theft.
What is tax identity theft? Tax identity theft occurs when someone steals your Social
Security Number (SSN) and uses it to file a fraudulent return in your name in order to
steal your refund (assuming that you’re entitled to one).
Unlike some other forms of identity theft, it can be hard to take preventative measures
to avoid tax identity theft. But there are some things you can do. Here’s what you should
know about tax identity theft.
WHAT ARE THE SIGNS OF TAX IDENTITY THEFT?
If you’ve been the victim of tax identify theft, the most common ways you’ll find out
include:
 Receiving a notice in the mail from the IRS informing you that it received a
suspicious tax return using your SSN.
 The IRS rejected your e-filed tax return because a duplicate return has already
been filed using your SSN.
If either situation happens to you, or you simply suspect something is amiss, the most
important thing you can do is be proactive and work with the IRS to resolve the
situation. Here are the steps to take:
IF YOU HEAR FROM THE IRS
The IRS will contact you by mail if it receives a suspicious return on your behalf, or if
you file a paper return and the agency already has one on file for you. If this happens,
respond to the notice immediately and follow the agency’s instructions, which will vary
based on your unique tax situation. For example, the IRS may ask you to fill out Letter
4883C or Letter 5071C, which are both used to verify your identity. You may also be
asked to fill out Form 14039, which is an identity theft affidavit that documents the
incident.
If tax identity theft has occurred, you will likely have to refile your tax return by paper.
Send in all requested forms using certified mail with “return receipt requested” to ensure
the documents are received.
Remember that the IRS only initiates contact with taxpayers by mail. If you receive an
out-of-the-blue phone call or email from someone claiming to be from the IRS, do not
respond or open the message.

IF YOUR ELECTRONIC RETURN IS REJECTED
While it has become very common to file your taxes electronically, if you think your
return is being rejected because someone has tried to file in your place, it is your
responsibility to get in touch with the IRS.
Before contacting the IRS, it’s a good idea to verify that you’ve correctly entered your
SSN and that someone who can claim you as a dependent hasn’t tried to use your SSN
on his or her return. Once you have verified those two things, you’ll need to file a paper
return along with Form 14039, which will alert the IRS that you believe you’ve been a
victim of tax identity theft.
WHAT TO EXPECT NEXT
Once the IRS has been made aware of your case and has concluded its investigation
(which can take about four months), the agency will place an identity theft indicator on
your account. It may also issue you an Identity Protection (IP) PIN — a six-digit number
that serves as an additional security precaution. You’ll need this number to file all
returns moving forward, and you’ll receive a new IP PIN every year (typically in
December).
ADDITIONAL STEPS TO TAKE
Once your identity has been compromised, there’s no telling how far a criminal will go.
So after you’ve taken all the necessary steps with the IRS, check in with your state’s tax
department to determine if there’s been any suspicious activity regarding your state
return.
In addition, the Federal Trade Commission recommends that you contact Equifax,
Experian or TransUnion (the credit bureau you contact is obligated to inform the other
two) and ask that a fraud alert be placed on your credit records. It may also be a good
idea to freeze your credit, if you haven’t already done so.
HOW TO PREVENT TAX IDENTITY THEFT
As the saying goes, the best offense is a good defense. While it’s difficult to stop a thief
from filing a false return, there are some steps you can take to make it more difficult for
them.
 File your tax return as soon as possible. Once you do it, a criminal can’t file in
your name.
 Set your withholding so that you don’t have a big refund coming your way. While
that’s generally a smart tax strategy, it also prevents a tax identity thief from
claiming it for themselves.

 Create strong passwords and vary them for all of your online accounts. Be
judicious about when you share personal information (like your SSN) to make it
more difficult for someone to steal it.

By Renée Ruggeri,