Tax-Related Identity Theft: What to Know and What to Do

Identity theft can happen at any time of the year, but it’s especially common around tax season. Tax filers use a lot of sensitive information to submit their returns, and identity thieves often find ways to steal this information for their own personal gain. If you’ve become the victim of tax-related identity theft, there are a few things that you should know.

Signs of Identity Theft

Most victims of tax-related identity theft find out about the theft in one of three ways:

  1. They attempt to e-file a return, and have it rejected because a return has already been filed using that Social Security number.
  2. They receive notices or collection actions for unpaid taxes for a year in which they did not file a return. (Please note that these would be written notices, as opposed to phone calls, which are a common tax scam.)
  3. The IRS reports that their records indicate income from an employer that the filer never worked for.

Each of these is a clear sign that someone has stolen your information. If you or your Provo tax CPA is notified of any of the above situations, you should take action immediately.

What to Do Next

Once you’re made aware of what has happened, here’s what you should do:

  1. File a complaint with the FTC on their website,
  2. Contact one of the three main credit bureaus (TransUnion, Equifax, or Experian) and place a fraud alert on your credit accounts.
  3. Contact your financial institutions and close any accounts that have unauthorized activity, as well as any accounts opened in your name without your permission.

If you are in the process of filing your return when you learn that your identity has been stolen, as is common for victims of tax-related identity theft, it’s important that you still file your return. Failing to file will simply cause more damage to your credit. If your e-filed return is rejected, fill out Form 14039 on the IRS website (Identity Theft Affidavit) and attach it to your return. Follow the IRS instructions for filing your tax return by mail.

If you are a client of Biesinger & Kofford CPAs, we will gladly assist you with filing your tax return manually in order to make the process go as smoothly as possible.

Reducing Your Risk

The best way to deal with tax-related identity theft is to avoid becoming a victim in the first place. And while there’s never a guarantee that your information will be stolen, there are a lot of things you can do to reduce your risk of becoming a victim:

  • Use security software on your computer that includes anti-virus software and a firewall.
  • Never use the same password on multiple accounts, and ensure that your passwords are strong ones. If necessary, use a password manager.
  • Learn to identify tax-related scams that try to steal your information. Never click on a link or open a document from a source you don’t trust.
  • Don’t carry your Social Security card or other important documents.
  • Keep your tax records secure.

Additionally, if you work with a Provo tax CPA to file your taxes, make sure it’s a company that you can trust. If you want to learn more about how we protect your information at Biesinger & Kofford CPAs, feel free to reach out to a member of our team.