Identity theft is a growing concern, and can be especially concerning when it involves your taxes. Scammers are continually finding new ways to steal personal information, potentially leading to fraudulent tax filings and financial losses. Thankfully, the IRS offers resources to help you safeguard your sensitive data and ensure your tax filings are secure. Here’s what you need to know to protect yourself against identity theft with the IRS.
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Recognize the Warning Signs of Tax Identity Theft
Tax identity theft happens when someone uses your Social Security number (SSN) to file a fraudulent tax return or claim a refund. Be alert to these warning signs:
- Unexpected IRS Notices: Receiving a letter from the IRS about a tax return you did not file is a major red flag.
- Duplicate Filing Notices: The IRS notifies you if multiple returns are filed under your SSN.
- Unexplained Account Activity: You notice unauthorized transactions or accounts opened in your name.
- Wage Reporting Errors: You see income reported from an employer you don’t recognize.
If you encounter any of these signs, act immediately by contacting the IRS and following their steps to resolve the issue.
Use the IRS Identity Protection PIN (IP PIN)
The IRS offers an Identity Protection PIN (IP PIN) program to enhance the security of your tax returns. An IP PIN is a six-digit code assigned to eligible taxpayers, which must be used when filing your return. Here’s how to get one:
- Visit the IRS Get an IP PIN Tool.
- Verify your identity by providing the required documentation, such as your SSN and tax filing details.
- Obtain your unique IP PIN and keep it confidential.
Each year, you’ll need a new IP PIN, which the IRS will provide through your online account. This added layer of protection ensures that only you can file a return using your SSN.
Safeguard Your Personal Information
Protecting your personal and financial information is key to preventing identity theft. Follow these essential tips:
- Be Wary of Phishing Scams: Scammers often impersonate the IRS via email, phone, or text. The IRS does not initiate contact through these channels. Always verify the source before providing information.
- Secure Your Devices: Use strong passwords, antivirus software, and updated operating systems to protect sensitive data on your computer and mobile devices.
- Shred Sensitive Documents: Dispose of old tax records, bank statements, and other documents securely.
- Monitor Your Credit: Regularly check your credit reports for unusual activity.
File Early and Monitor Your Tax Account
Filing your taxes early reduces the chances of a fraudster filing before you. Additionally, you can monitor your IRS account online to check for unauthorized activity such as tax liens. To create an account:
- Visit IRS.gov and select “Create or View Your Account.”
- Verify your identity using the required documentation.
- Regularly review your account to ensure no unauthorized tax filings or transactions have occurred.
Respond Quickly to IRS Notifications
If the IRS contacts you about suspicious activity, don’t ignore the notice. Instead:
Verify the communication’s authenticity by contacting the IRS directly at their official phone number.
- Follow the instructions in the letter to address the issue.
- Consider filing Form 14039, Identity Theft Affidavit, to alert the IRS to the problem.
Protect Your Future
Tax-related identity theft is a serious issue, but with vigilance and proactive measures, you can protect yourself. Use the resources provided by the IRS, stay informed about potential scams, and seek expert guidance when needed to secure your financial well-being.
Book a free consultation with a Guardian Tax Professional today to get clear answers to your unique situation.
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