‘Tis the season for tax fraud and identity theft via tax-related scams.  Tax fraud has been on the rise for years, and nearly 1 out of every 2 Americans are at increased risk for tax fraud due to the Equifax breach.  145 million Americans had their personally identifiable information (PII) stolen during that breach, bringing added stressors with increased unknowns.  After the breach, you may have been instructed to freeze your credit and take precautions to protect your finances, credit, and life from potentially malicious actors, but it must be noted that freezing your credit is not enough to prevent tax fraud. If a malicious actor possesses your Social Security Number (SSN), they are able to attempt to file fraudulent tax returns on your behalf. So, how can you protect yourself during this terrifying tax season?  

Stay Safe in the Tax Season After Equifax

File Early

You should file your tax returns early, well before April 15th, to avoid anyone else using your information to file fraudulent tax forms. Recently, a friend mentioned they already had their W-2s, so they felt secured against tax season identity theft. However, this is NOT the protection against identity theft. It should be noted that the IRS will only verify your taxes with your employment records in the event of an audit. There are few to no safeguards within the IRS’s tax season workflow that seek to verify or protect the average consumer. Once the IRS receives your tax returns, any additional ones would be flagged as potential fraud.  

File Electronically

Filing electronically will prevent any paper trail that could provide someone with your Social Security number. Additionally, Florida, Georgia, and the District of Columbia offer their residents a one-time-use identity protection personal identification number (PIN). If you live in one of these states, PLEASE use and obtain your PIN. Free protection is great protection! Individuals who receive a CP91A Notice will also be able to get a PIN number, and the IRS will send some individuals the option to Opt-In to the PIN program via USPS mail. If you receive an invitation, call the IRS directly to enroll, and do not provide any information to an unverified source. Knowing the following things can help avoid identity theft:

  • The IRS will NOT email individuals. Do NOT respond to or interact with emails from the IRS or state tax authorities. Instead, call the agency directly to verify the email. 
  • The IRS DOES NOT call individuals. If you receive a call from the alleged IRS, tell them you will call them through the IRS phone line. That number is 1-800-829-1040.  
  • IF you receive a call, ask for the contact information and alleged name of the caller.  
  • Do NOT give out financial or personal information over the phone. This includes: 
    • Types of credit cards 
    • Whether you own a credit card 
    • Types of debit cards 
    • Whether you own a debit card 
    • Account numbers 
    • Financial institutions with which you hold an account or a line of credit 
  • The IRS will not ask you to wire money or use a pre-paid card. 
  • Absolutely NEVER wire or send any money based on a single call. VERIFY the individual beforehand.   
  • Report the call by filing a complaint with the Treasury Inspector General online or by calling 800-366-4484, and to the FTC online or by calling 877-FTC-HELP. 

If you believe you are a victim of identity theft:

  • Contact the IRS Identity Protection Unit online, or by calling 800-908-4490. 
  • File an Identity Theft Affidavit (Form 14039). 
  • Report the fraud to the police. 

Stay vigilant, think critically about urgent information presented to you, and don’t procrastinate on filing your tax returns this year!