As the IRS points out on its website, identity theft is a big challenge for businesses, organizations, and governments, including the Internal Revenue Service. However, it's also a severe issue for us individuals, especially if we're unfortunate enough to become another one of the victims. While improvements continue to be made, and it is getting harder for fraudsters to steal your identity, the situation is also quite fluid.
Criminals tend to adapt to the preventative measures taken to stop them and then come up with another way to access our personal information. So while it's a good idea to listen to the official advice and read up on the latest developments, another option is to consider an identity theft protection package.
On top of that, you can take other preventative measures, which might at least reduce your chances of becoming a victim of identity theft. If you've been unlucky enough to go through something like tax-related ID theft, where fraudsters have managed to get hold of your Social Security number, e-filed a fake tax return, and subsequently stolen your tax refund, you'll know that it can happen surprisingly quickly.
- Check out the best identity theft protection
- The best tax software around today
- Take a look at the best accounting software
Thankfully, the IRS and other government departments have measures to offer help and assistance if you’ve suffered identity theft. Along with the hassle factor, the stress, and the chaos it causes, tax-related identity theft can also cause financial hardship. Losing your tax refund to fraudsters can be a big blow, so it’s helpful to know where to look if you’re after some guidance.
One part of the process is if you tell the IRS that you’ve been a victim of tax-related identity theft, your case will be assigned to the Identity Theft Victim Assistance organization or IDTVA.
The IRS will assign a specially trained staff member to help with the research involved with your case and help resolve matters where possible. This will take the form of several steps designed to hopefully reduce those stress levels and limit the ongoing damage.
The person handling your case from the IDTVA organization will be able to assess the situation. They should be able to work out if the identity theft is limited to one tax year or spans a more extended period, along with tackling other issues that might relate to the fraudulent return. This ensures they don't miss anyone else who might have been implicated in the fraudulent return.
Therefore, they'll need to pick through and authenticate all names, addresses, and Social Security numbers. On top of that, they'll analyze the case and check on any outstanding issues that might have occurred due to the fraud.
Crucially, they can also help ensure that your tax return is processed correctly and ascertain whether you'll be due a tax refund, subsequently helping to release it if that's the case.
The other benefit of having this sort of ID theft assistance is that it will enable them to mark your tax account with what the IRS calls an identity theft indicator. Not only does this round out the case closure process, but it will hopefully help prevent you from suffering a similar experience in the future.
According to the IRS, you will eventually receive confirmation that your case has been resolved. Often this will be within 120 days, although the government department underlines that more complex cases can take up to 180 days and maybe even longer.
Another aspect of the investigation and case process is that some tax-related identity theft victims get placed into the Identity Protection PIN program, which offers them more protection from fraudsters.
The IRS generally instigates this, but from 2021 there has also been a voluntary opt-in process for the IP PIN program. This does involve passing a series of stringent verification measures, and the IRS outlines the criteria on a dedicated site page.
Following an experience of tax-related identity theft, you might find you’ve got more of an interest in what else can be done to minimize its effects of it in the future. There’s a great awareness campaign currently being run, which is also supported by the IRS, state tax agencies, and the tax industry to highlight issues about this ongoing problem.
Called Taxes. Security. Together, the online hub features all manner of information that, in many ways, is hoping for the public to help the IRS tackle the problem head-on. The website contains news of events and campaigns, including National Tax Security Awareness Week, along with lots of advice.
While there’s valuable information for regular taxpayers, the site also has resources for tax professionals and advice on how they can help fight identity theft from their perspective.
If you're a tax professional, you can also head to the IRS hub, which offers help and advice for people working in the industry. Businesses that handle the tax affairs of lots of individuals and companies too can find out how to report instances of data theft, along with getting insights on how to protect clients and prevent data loss.
It's also beneficial for identifying your firm's responsibilities, irrespective of the size of the operation, so it's well worth working through the documentation to check that you have all bases covered. If you're still unsure of everything to look out for, this is another aspect of the site that covers everything you need to know. Thankfully it's all done in a straightforward, no-nonsense fashion.
- Check out our roundup of the best identity theft protection