Children Being Exploited in New Type of Tax-Related Identity Theft

There’s a new type of tax-related identity theft and it targets children. In this blog post, we will talk about a type of tax-related identity theft that involves minors and some of the things you should do if it happens to your child.

This past tax season, LibertyID’s lead restoration specialist Suzanne Ford received a case that involved a 5-year-old’s Social Security number being used in a fraudulent tax return. The thief claimed the minor/victim as a tax credit.

“The situation came to light when the mother of the child received a call from her ex-spouse advising her that he attempted to use the child’s Social Security number for his 2016 tax credit and received word from the IRS that it had already been used on a 2016 tax filing,” Ford said.

The father of the child received a letter from the IRS to sign and return along with his tax return (in paper format). Ford provided IRS Form 14039, Identity Theft Affidavit, for the parents to fill out on behalf of their child, reporting the minor as a victim of tax fraud.

Ford also recommended the parents place a credit freeze on their child’s credit through the three major credit bureaus — Experian, Equifax and TransUnion. A credit freeze, also called a security freeze, “lets you restrict access to your credit report, which in turn makes it more difficult for identity thieves to open new accounts in your name. That’s because most creditors need to see your credit report before they approve a new account. If they can’t see your file, they may not extend the credit,” according to an FAQ on the Federal Trade Commission website. Because a minor’s report is often unestablished, there is a different process you need to follow to initiate the credit freeze. For detailed instructions on how to do so, visit our blog post.

Unfortunately, Ford has witnessed a high rate of recurring full victim identity theft incidents on victims who started out as victims of tax identity theft where new credit and other accounts have been opened using the person’s personal information. So if you or your child is a victim of tax identity theft, beware it could progress into other types of identity theft.

If your child’s identity was stolen, who would you call? LibertyID members rest easy knowing they have someone to call who can help them resolve the mess. Some estimates show it can take up to 200 hours to resolve identity theft. When you’re covered by LibertyID’s Extended Family Plan, a dedicated specialist handles everything for you and will restore your child’s identity. Just remember — you have to be covered before there’s an incident.

This post is part of our ongoing series about tax-related identity theft in honor of Tax Identity Theft Awareness Week, slated for Jan. 29-Feb. 2, 2018.
Here are our additional blog posts within the series:

4 Signs to Watch For That Could Indicate You’re a Tax Identity Theft Victim

Watch Out For These IRS-Related Tax Refund Fraud Scams

The No. 1 Thing You Can Do to Prevent Tax Identity Theft

7 Steps Business Owners Should Take to Protect Against W-2 Phishing Attacks

Residents of 3 States Eligible for an IRS IP PIN to Prevent Tax Refund Fraud

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