From Jan. 25th through 29th, the Federal Trade Commission (FTC) – in partnership with the Internal Revenue Service (IRS) – will be sponsoring Tax Identity Theft Awareness Week to inform consumers about:
- What tax identity theft is
- How to reduce their risk of becoming a victim of this type of identity theft
- What can be done if a thief has stolen their refunds.
How Tax Identity Theft Occurs
Tax identity theft typically starts in the same way as other forms of identity theft: a consumer’s personal information – like his social security number (SSN) – is stolen or fraudulently obtained (via garbage, mail, email, etc.). Then, identity thieves generally will:
- Use that stolen info to file a tax return in the consumer’s name (but using the thief’s address)
- Collect the IRS refund check, as the IRS will not necessarily be aware that the tax return is fraudulent.
When the consumer then goes to file his tax return, he will be notified that a return has already been filed in his name. As the IRS explains:
You may be unaware you are a victim of tax-related identity theft until you file your tax return and discover a return was already filed using your SSN.
How to Prevent Tax Identity Theft
The IRS estimates that, every year in the U.S., identity thieves steal about $2.3 billion of consumers’ tax return funds. To avoid becoming a victim and part of this statistic, here are some things to do – and to avoid doing:
- Do NOT regularly carry your SSN card or any documents with your SSN on them.
- Do NOT provide your SSN to any business unless it is absolutely necessary.
- Do NOT provide your personal information to anyone over the phone or Internet unless you know the person/entity, you trust them and you initiated contact with them.
- DO take steps to protect your personal information on your home computers via antivirus software, firewalls, etc.
- DO regularly review your credit report.
Warning Signs of Tax Identity Theft
You may have been the victim of tax identity theft if you are notified by the IRS and/or your state that:
- More than one tax return has been filed in you r name.
- You owe more taxes or have collection actions being taken against you for a year in which you did not file a return.
- You have earned wages from an employer for whom you never worked.
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