Preparing and filing your tax return can be stressful enough without the added burden of finding out your identity has been stolen. This was the unfortunate scenario for many individuals in 2015.
Identity theft has become a serious problem over the past several years. There are many forms of identity theft but the most commonly discussed form is tax identity theft. Tax identity theft occurs when a person fraudulently files a return in your name and your social security number in order to receive a refund. According to the Federal Trade Commission, 2014 marked the fifth consecutive year in which tax-related identity theft topped the list of identity theft complaints.
The first step to combatting tax identity theft is to protect your information. Some steps to protect your information include:
- Guard your computer from malware and maintain an updated firewall and operating system;
- Safeguard your passwords, update frequently, and make them long and complicated;
- Retrieve your mail as soon as possible;
- Do not carry your social security card or any document with your social security number on it;
- Remember to apply safeguards to your tablets and phones especially if you access email or online banking through these devices.
The next step is to monitor your information. Individuals who were members of Anthem are eligible for free credit monitoring (go to https://www.anthemfacts.com for more information). Some steps to monitor your information include:
- Always be suspicious of phone calls or emails asking for personal information;
- Do not give out information via phone unless you have initiated the phone call or are absolutely; sure of who you are talking with. Any information emailed should not include social security numbers or if necessary, should be sent encrypted;
- Review your credit report at least annually for unusual activity or consider subscribing to a credit monitoring service, or;
- If you feel you are at high risk for identity theft, consider freezing your credit.
You should become suspicious of possible identity theft if the IRS has sent you a notice or letter that states:
- More than one tax return was filed for you;
- You owe additional tax, have a refund offset or have had collection actions taken against you for a year you did not file a tax return;
- IRS records indicate you received wages from an employer unknown to you;
- Any other unexpected, suspicious documentation received by the IRS, or;
- State or federal benefits were reduced or cancelled because the agency received information reporting an income change.
If you do believe you are a victim of identity theft, it is important to act quickly with a plan to help ease the recovery process. The following are the steps provided by the IRS to be taken:
- File a report with the local police.
- File a complaint with the Federal Trade Commission at identitytheft.gov or the FTC Identity Theft Hotline at 1-877-438-4338 or TTY 1-866-653-4261.
- Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:
If your SSN is compromised and you know or even just suspect you are a victim of tax-related identity theft, take the following additional steps:
- Respond immediately to any IRS notice; call the number provided.
- Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form at IRS.gov, print, then mail or fax according to the instructions. As mentioned above, this form should be filled out even if you just suspect you are a victim. Within the form, the option of whether you are or you suspect you are a victim is included in Section A of the form.
- Continue to pay your taxes and file your tax return, even if you do so by paper.
In the end, by following the above steps your fraudulent refund will be corrected, but that does not mean you are in the clear from future theft. The refund thieves may try to claim your refund next year as well, so if you are a victim you also have the option of obtaining a unique verification PIN code from the IRS (called an Identity Protection PIN) that must be used to file future returns.
Experiencing identity theft can be frustrating and confusing. The team at HRH is available anytime to help you navigate your options.