Tax-related identity fraud is a severe threat to your financial well-being. It can cause an array of problems and headaches, from faulty tax returns to late or missed payments and lots more. The IRS has estimated that about eight million victims of identity piracy are linked to tax every year, which comes out to about 1 in every 100 taxpayers.
Fortunately, you can take steps to protect yourself by learning how this crime works and what indications to look for if you suspect you’re a victim.
Confusing IRS Letters
If the IRS notifies you of a questionable tax return you did not file, this is a tell-tale sign that something isn’t appropriate with your identification and personal information. If you receive such a notification, you must follow the requirements within 30 days to establish your identity with the IRS. If you feel a bogus return was filed, you can also request a copy from the IRS.
If you receive an unusual IRS notification, it may be a good idea to contact them directly and clarify what’s going on with your account—the sooner you get in touch, the better!
The IRS sends a letter stating you filed more than one tax return.
If you are unusually notified by the IRS stating that you filed two or more tax returns under your name, it’s likely to be a sign of fraud. If the IRS has contacted you about this issue and they need more information from you, they will let you know. Otherwise, if someone else uses your name and Social Security number on their tax return(s), that person may have committed identity piracy against you.
You should report all identity theft involving tax instances by contacting the IRS at 800-908-4490. The agency will ask some questions about what happened so they can begin investigating and taking action against any fraudulent activity associated with your social insurance number or other identifying information.
You receive a notice that you owe extra tax, even though your income is the same as last year.
If you acquired a warning from the IRS that you owe extra tax, even though your income is the same as last year, there are a few possibilities that could explain why.
- You may have overlooked deductions.
There’s a chance that you forgot to claim certain deductions on your tax return. If so, it’s likely that this was an honest mistake and not something done maliciously by someone else pretending to be you (which would be tax-related identity plunder).
To help avoid such mistakes in future years, it might make sense to change your method of organizing receipts or keep track of expenses electronically to save time and effort when filing taxes each year.
You must modify your tax return if you earned the disputed income or wages. Do not call the IRS if you did not acquire the income. Instead, get in touch with the business or organization that provided the payment and request that the error is corrected.
Unwarranted Collection Mailings
If the IRS mails you a collection notice for a debt you don’t owe, contact the IRS immediately and let them know. The IRS will investigate and try to resolve the matter.
If you receive a collection notice for a debt that is yours, contact the IRS so they can assist in resolving as promptly as possible in filing returns and payments issues to avoid further problems.
You get calls from someone trying to collect your unpaid IRS tax debt.
If someone calls you and claims to be collecting a debt for something you didn’t buy or pay for, it’s likely a scam. The caller may convince you they’re from the IRS or another government agency.
They can also disguise themselves as a representative of a tax debt relief agency, offering you tax debt settlement and tax debt relief programs by the IRS.
Be wary of suspicious phone calls where someone claiming to represent a government agency demands personal information over the phone or threatens arrest over unpaid taxes during these conversations; these calls are scams meant only to make money off people who don’t know better!
You get bills and collection notices for unknown services or items.
If you have encountered identity theft in relation to taxes, you may start receiving bills and collection notices for things that you didn’t buy or pay for. For example, if someone stole your Social Security number and used it to open an account with a credit card company, the credit card company will send you a bill for the charges they racked up on their way through your bank account. If this happens to you, contact the company immediately—and ask them not to try again!
Another sign is getting bills or collection notices for services or items that don’t belong to you. This could be anything from utilities like electricity and water to phone service to cable television packages (or even gym memberships) that someone else might have opened up using your stolen data. Whatever it is, call whoever sent it right away—and ask them not to try again!
You receive notification from the IRS that someone has accessed or disabled your current online account while you were inactive.
If the IRS notifies you that a new account has been opened in your name, it’s possible that someone committed a tax-related identity scheme using your stolen social identification number and/or other personal data.
Another red flag is when you don’t log in or take any action, the IRS sends you a warning that your existing account has been accessed or disabled. To report suspicious behavior, call the IRS Tax Fraud Hotline at 1-800-829-0433.
You unexpectedly receive a tax transcript in the mail.
If you receive a tax transcript in the mail that you did not request, it’s probably a scam. If you have received a transcript and it’s legitimate, you will be able to verify its legitimacy by checking your prior year’s tax return.
If this occurs, stay in touch with the IRS immediately and let them know about your situation so they can help prevent further issues with your personal information.
Be sure to pay attention to these signs.
The greatest course of action when it comes to identity theft is prevention. This is due to the long-lasting effects of misusing your personal information.
The following actions are recommended if you want to stop identity theft that is related to taxes.
- Don’t provide your social security number.
Tax-related identity theft occurs when a thief gains access to your social security number. Maintaining the safety and privacy of your SSN is crucial.
- Know the warning signs.
Don’t ignore any IRS notices. If you receive a statement from the IRS, paying attention is crucial. If there are errors on your tax return, or if you don’t think you owe as much money as is being claimed by the IRS, call them right away.
- Contact a licensed tax preparer or tax debt relief expert to protect yourself.
The best way to protect yourself from this fraud is to contact a tax debt expert before filing your taxes.
We, at 833IRSHelp, can help you navigate and understand the tax code, which is a confusing mess of numbers and regulations that can be difficult for even the most educated people to understand.
Our experienced tax debt relief agents can tell you if suspicious activity has been detected on your account. Additionally, they help you file securely so no one else can see or access your information.
Tax identity theft is a massive risk to all taxpayers, and it’s something that you should be aware of at all times. Even if you are careful with your personal information and use tax preparation software to fill out your forms, you can still be vulnerable to falling for the creative crafts of these scams. It’s essential to keep your eye out for follow-ups regarding tax filings and take action immediately if anything looks suspicious.
Hopefully, we’ve helped you better understand the issue so that you can limit the chances of falling victim to criminals looking for ways around the law.