Tax-related identity theft happens when a criminal uses your Social Security number to file a tax return claiming a fraudulent refund. You may find out about the fraud when your e-filing is rejected because someone already filed a return using your Social Security number. Or, you may receive a letter from the IRS stating that they flagged a suspicious return using your information. So the question is, if you suspect that you’re a victim of tax-related identity theft—what do you do?
Report Tax Fraud Online at IdentityTheft.gov
If you believe you are a victim of tax-related ID theft, your first step should be filing a complaint at IdentityTheft.gov, according to the Internal Revenue Service (IRS) and Federal Trade Commission (FTC).
In 2018, the IRS and FTC teamed up to enable victims to more easily report tax-related identity theft. IdentityTheft.gov provides an online tool that walks you through a series of questions in order to fill out both the Identity Theft Report needed for the FTC and the Form 14039 Identity Theft Affidavit needed for the IRS. The website also provides a personalized identity theft recovery plan based on the information you enter.
The FTC recommends downloading a copy of the report for your own records. After approximately 30 days, you should receive a letter from the IRS confirming receipt of your report.
Yes, You Still Have to File and Pay Your Taxes
It’s important to note that reporting suspected tax identity theft to the IRS and FTC does NOT eliminate the need to pay your taxes. If your e-filing was rejected, you will still need to mail your return to the IRS and pay any taxes you owe.
Learn (a Little) About the Suspected Thief
It may be possible to glean some information about the thief by requesting a copy of the fraudulent return from the IRS.
You may be able to receive a redacted copy (one with certain information blacked-out) of the fraudulent return if your name and Social Security number were listed as either the primary or secondary taxpayer. A redacted return may only show, for example, the first four letters of the last name of the taxpayers on the fraudulent return. According to the IRS, the remaining information should be able to help you determine what details the thief may have about you and your family.
Since identity theft often requires access to personal information, keep in mind that the perpetrator could be a family member, friend, or caregiver.
For more information, the IRS provides a Taxpayer Guide to Identity Theft.