Identity theft can be daunting and stressful for people who fall victim to it. It’s important to know what tax related identity theft is, and to recognize the warning signs. Although there are many ways to come back from identity theft, it’s better to be prepared and reduce the risks ahead of time.
What is tax related identity theft?
Tax related identity theft occurs when your social security number has been compromised or stolen and is used to file a false refund. It’s hard to know when this happens, but you can become aware when filing your taxes or the IRS might send you a letter suspecting fraud.
Other warning signs:
- Showing more than one tax return filed for you
- Owing additional taxes, refund is offset
- Collection action taken against you for a year you didn’t file a tax return
How to Reduce the Risk
There are many ways to help reduce the risk of identity theft, being knowledgeable and aware is the best practice to keep you protected.
Some of the easiest ways to reduce risk is:
- Use security software on your devices
- Avoid phishing emails, calls or texts posing as a financial institution
- Do not click any links or downloads from unknown emails
What to do if You Become an Identity Theft Victim
If you become a victim, the first thing to do is create a recovery plan. Visit identitytheft.gov for the steps and resources needed to guide you through the process. They will ask you a list of questions to collect as many details as possible about the theft. Next, they will help you create a recovery plan and begin working on it. It is an extremely helpful tool during stressful times, that even helps you fill out your forms and letters.
What is an Identity Protection PIN (IP PIN)?
An IP PIN is a six-digit number available for you to use when filing a tax return. It helps protect your social security number or taxpayer number when filing your taxes electronically or by paper. The IRS has an electronic tool to request an IP PIN. You can file an online application or paper application for an IP PIN. Once you receive the PIN, you’ll use it to file taxes. If filing electronically, it will prompt you to provide the PIN, or there is a space on the paper forms. If you are using a tax preparer, you will want to provide your IP PIN to a trusted tax preparer. It is important to remember that your IP PIN is only good for one year, and you will be sent a new one each year.
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