As tax season kicks off, it’s crucial to remain vigilant against the ever-present threat of identity theft. With the abundance of personal and financial information exchanged during this time, opportunistic cybercriminals are poised to exploit any vulnerabilities they can find. Now is the time to be on guard. Taxpayers must take proactive steps to safeguard their information and financial well-being. Make sure you understand the risks—and what might come next!
The Worst Time for Identity Theft
How much of a tax refund are you expecting? Until you actually file your tax return, you won’t really know. The IRS won’t know either until you file.
Throughout the course of the year, your federal tax account with the IRS has likely been accumulating a good amount of money through your withholdings. Thieves know that the IRS might need to pay some of that back to you, which is why they might use the early filing season to get a jump ahead of you. If they can file a fraudulent tax return before you submit your own, then they’ll be set up to steal some of your withholdings by claiming that tax return for themselves. It’s a terrible trick, and if you aren’t careful, they could get away with your money.
You can improve your chances of staying protected by filing your tax return sooner, rather than later. That way, a thief will be less likely to get to your refund first. But apart from that, there are still other ways you can keep your information safe. The more steps you take, the better.
Protect Your Tax Account Information
You can beat the criminals to the punch by filing early. Another strategic move is to get an Identity Protection Pin (IP PIN) from the IRS. Any taxpayer who can verify their identity is eligible to get their own IP PIN. It’s a six-digit code that’s kept private to only you and the IRS, and can help stop identity thieves from gaining access to your tax refund. You can get yours by visiting www.irs.gov/IPPIN.
There are other ways to safeguard your tax refund too. They relate to protecting your ID in all forms. For example, you might want to check your credit reports. If you notice any suspicious activity, that could be a sign that thieves are looking to take control of your tax identity.
Your actions throughout the year can also help keep your identity safe this season. Making a habit of shredding important documents and never giving out your Social Security Number is critical. Be cautious of strange mail, as well as phone calls. The best defense against ID theft with the IRS is to keep your information safe at all times, from every angle.
Next Steps with the IRS
Although there will always be concerns related to identity theft, you can take control of the situation by remaining on guard. What’s more, the IRS continues to get better at catching problems. If they suspect something is wrong with your account and filed return, they’ll take action by sending you a notice.
Anyone who receive such a notice from the IRS should respond immediately. Check the IRS website for the direct contact information to start the conversation about the potential identity theft problem. From there, you may need to file an Identity Theft Affidavit (IRS Form 14039). This works to formally record the issue with the IRS and will help ensure that they take the necessary steps to keep your account safe (i.e., that your activity is coming from you and not being attempted by a thief).
It may also be necessary to file a police report and contact your credit bureaus. That’s why staying vigilant throughout the year and filing early can keep your risks near zero. One more thing that’s good to keep in mind, though, is that the IRS is responsible for the loss of paying out a refund to someone who has stolen your identity. So while it’s definitely a hassle, your money won’t be gone forever.