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How to report tax-related identity theft to the IRS

Here’s how to let the IRS know if you've been affected by identity theft and the steps to take next

ID theft
(Image: © Pixabay)

Anyone can be a victim of identity theft, which is why it’s an excellent idea to get signed up for the best identity theft protection, which can certainly help. Increasingly though, it is tax-related identity theft that’s becoming a significant issue across the US.

This can happen to anyone anytime, with criminals using your stolen personal information, such as your Social Security number, to file a tax return (opens in new tab). After doing that, they will go after your tax refund, which is obviously fraudulent but can also cause you a lot of hassle and, naturally, leave you out of pocket.

Acting fast

Along with knowing what to keep an eye on regarding your personal tax (opens in new tab) affairs to spot any identity theft, you'll also want to know what to do next if it happens. Unfortunately, many people don't realize they've been the victim of identity theft until the IRS notifies them, so having at least an idea of what to look out for is sensible.

Several things can lead you to feel like you've been the victim of identity theft, and one of the first is if you get a letter from the IRS. It might be asking you about a tax return you do not know about filing. It may be that you can't e-file your tax return because there is a duplicate of your Social Security number in circulation.

ID theft

(Image credit: ftc.gov)

Alarm bells

Other factors that indicate you might have been the victim of identity theft is a tax transcript arriving through the mail that you weren’t expecting. You may also get an IRS confirmation of a new online account created in your name, even though you didn’t open one. Similarly, your existing online account might have been accessed or disabled without your knowledge.

Look out for any notices from the IRS suggesting you owe additional tax or refund offset. You might also experience collection actions against you that might cover a year you didn’t even file a tax return. On top of that, you may find that IRS records show you have received wages or other unattributed income from an employer you’ve never worked for.

Taking action

If anything like this has happened to you and you feel you might be a victim of tax-related identity theft (opens in new tab), then the IRS has some excellent guidance on what to do next. 

While the central issue might be that your Social Security number has been compromised, other areas where your details might have been stolen too. If you suspect anything like this has happened, you need to respond immediately to any notices you receive from the IRS using the phone number they supplied.

If you’ve already e-filed a return and it gets rejected, then this may be because of a duplicate filing, possibly because someone has been using your Social Security number, you’ll need to complete IRS Form 14039 (opens in new tab), the Identity Theft Affidavit. It may be that the IRS instructs you to do this instead. Either way, use the fillable form via IRS.gov, print it, and mail the document using the official guidance.

Next steps

Following that move, the next port of call should be to visit IdentityTheft.gov (opens in new tab), a hub dedicated to helping you through the next steps involved in post-identity theft. It’s got some excellent practical guidance on how best to proceed and the core things you need to do to minimize the fallout from having your details compromised.

Regarding prioritizing what you need to do, the site sets out its stall nicely. First up, you’ll want to call any companies where you think there might have been fraudulent issues relating to your details. You will still need to file your tax return and naturally pay any taxes you owe, which might have to be done using paper tax returns until the situation is resolved. 

Make a point of keeping a record of who you contacted and the dates involved. In addition, be sure to retain copies of any correspondence.

ID theft

(Image credit: ftc.gov)

Credit bureaus

The other thing to do is place a fraud alert by contacting one of the three credit bureaus, including TransUnion (opens in new tab), Experian (opens in new tab), and Equifax (opens in new tab). You might only contact one, but they must tell the other two. You’ll also want your free credit reports from TransUnion, Experian, and Equifax. The IdentityTheft.gov (opens in new tab) site advises heading to annualcreditreport.com (opens in new tab) or calling 1-877-322-8228 (opens in new tab) to do this.

While this government advice hub can help if you’ve been the victim of tax-related identity theft, it is also an excellent resource if you’ve suffered from other forms of fraud. There is guidance on what you should do if you’ve been the victim of tax, medical, or child identity theft, along with a whole host of other topics designed to make the experience slightly less stressful.

Preventative measures

Of course, the other thing to do if you don't already have measures in place is to secure your personal information. Choosing one of the best identity theft protection (opens in new tab) packages is an excellent way of combating fraudsters. Still, signing up for security software is also a good idea if you don't already have it.

Investing in a password manager (opens in new tab) is another prudent move, which will help secure all those passwords that we accumulate now that so much of our daily lives are online. Even taking steps to reduce the flow of conventional junk mail is another way you can reduce your profile. 

Simply making it less easy for ID thieves (opens in new tab) to get hold of your details is one thing, while remaining vigilant about protecting your personal information is the other key issue to address. The threat might always be there, but you can at least do your bit to reduce it.

Rob Clymo
Rob Clymo

Rob Clymo has been a tech journalist for more years than he can actually remember, having started out in the wacky world of print magazines before discovering the power of the internet. Since he's been all-digital he has run the Innovation channel during a few years at Microsoft as well as turning out regular news, reviews, features and other content for the likes of TechRadar, TechRadar Pro, Tom's Guide, Fit&Well, Gizmodo, Shortlist, Automotive Interiors World, Automotive Testing Technology International, Future of Transportation and Electric & Hybrid Vehicle Technology International. In the rare moments he's not working he's usually out and about on one of numerous e-bikes in his collection.