The 31 Flavors of Identity Theft – IRS Tax Identity Theft

#1 IRS Tax Identity Theft

IRS tax identity theft occurs when a criminal uses the personal information of another taxpayer to file the annual income tax and receive the other person’s tax return. Criminals perform this type of crime on a large scale, putting many people at risk. Massive data breaches of corporations that handle your personal information allow criminals to collect the information needed to operate on such a widespread scale. 

 The fallout from this type of identity theft can be some of the most devastating because a United States governmental agency is involved, and it can tarnish your personal information and reputation for years if not resolved. You may be audited, owe back taxes, and even have to personally pay back the refund that the criminal received when the IRS reviews your taxes. 

IRS tax identity theft is a crime that threatens all Americans and results in stress and anxiety as they now must contact the IRS and wait additional weeks or even months for their tax refunds.

What are the signs of IRS tax identity theft? 

Unlike some other forms of identity theft, IRS tax identity theft cannot be detected through credit monitoring. Therefore, you may not know that you have fallen victim to IRS tax identity theft until you are notified by the IRS of an issue with your tax return. Below are some signs that someone may have filed your income tax return using your Social Security number to receive your tax refund:

  • Suspicious Tax Return Letter from the IRS: The IRS is working diligently to prevent fraudulent filing of tax returns, but unfortunately with over 300 million people who live in the United States, unfortunately some returns slip past the protocols that the IRS has in place to prevent fraudulent filings. If the IRS suspects a fraudulent tax return was filed using your Social Security number, they will send you a letter in the mail to your last known address claiming they received a suspicious tax return.
  • Not Permitted to e-File: Many people are utilizing the internet to e-file their taxes to expedite the process. Criminals are also adopting this method of filing fraudulent returns, too. You will likely become aware that someone has already filed using your personal information when you attempt to e-file your actual return because you will not be permitted to file due to a duplicate Social Security number.
  • Records Indicate Income from an Employer You Did Not Work For: Everyone wants to make more money. But if IRS records indicated that you received wages or other income from an employer that you did not actually work for, it can be a big problem.  If this is the case, it is likely that you have fallen victim to IRS tax fraud.

Credit monitoring will not alert you to this type of identity theft.

 LibertyID will take the following steps for/with their members:

  • Recognize when an IRS investigation is necessary and work with the victim to complete the IRS Form 14039 Affidavit (which initiates the IRS investigation)
  • Ensure that all the victim’s information is accurate, and all required documentation has been gathered and provided to avoid delays in IRS processing
  • Confirm receipt of the form and information with the IRS and obtain IRS case number/details
  • Check-in regularly with the IRS to determine the status of the case and provide updates to the victim
  • Place fraud alerts at all three credit reporting agencies
  • File report with FTC
  • File a fraud report with the IRS
  • File a police report
  • Review credit reports with the victim to ensure there are no other types of fraud or identity theft
  • Provide credit monitoring with alerts for 12 months
  • Periodically contact the member throughout the 12 months following resolution of their ID theft recovery case if warranted