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How you can avoid tax-return identity theft

Blog Post
2 min read
social security card

Filing a federal tax return should be an easy way for taxpayers to fulfill their legal obligation, not an easy way for crooks to advance one of their nasty schemes. But wherever there’s opportunity, there’s a criminal waiting to take advantage of an unsuspecting victim. Tax return identity theft, aka stolen identity refund fraud (SIRF), is on the rise — and taxpayers who know the signs of this growing scam are in the best position to keep their sensitive data out of the hands of thieves. 

What is Tax Return Identity Theft?

Tax return identity theft occurs when someone uses the personal information (i.e., legal names and Social Security numbers) found in tax documents to file a phony return. This scam typically starts when bad actors steal sensitive customer data from computer systems. Some fraudsters are bold enough to impersonate Internal Revenue Service (IRS) agents and demand that you provide them with your personal information to help resolve a fake IRS issue. 

With only a few pieces of stolen personal data, criminals can file a federal income tax return using your information. 

Sadly, you only learn there's a problem when you file taxes. Your e-file return will be rejected, or you’ll receive written notification from the IRS that your return wasn't accepted. That’s because someone else already filed a return for the same tax year with the same social security number, resulting in a duplicate return. If you’re expecting a tax refund, you probably won’t receive it until the situation is resolved. 

Protect Yourself from Tax Return Identity Theft

Knowledge is key to avoiding most financial scams. Use these tips to keep your private information out of the hands of thieves.

Stay alert to IRS communications received through email and U.S. mail. You might stop an attempted tax return identity theft in its tracks if you notify the IRS immediately upon receiving communication from them about:

•    A new IRS online account you didn’t open
•    Tax return transcripts you did not request
•    Changes to prior-year tax returns you did not submit
•    Updates to an existing IRS online account you didn’t initiate 

File your taxes early. Get ahead of these crooks by filing your taxes as early as possible. Their return will be rejected if they try to file a return in your name after you do.

Be careful when selecting a tax preparer. If you give your tax documents to someone else to file for you, ensure the person you choose has the required credentials. Check to see if they have customer complaints filed against them with the Better Business Bureau® or your state attorneys general’s office.

Do You Suspect Tax Refund Fraud?

If you believe someone has or is trying to file a federal tax return using your information, report the incident immediately to the IRS Identity Protection Specialized Unit at 800-908-4490. You can also read Identity Theft Victim Assistance: How It Works for more IRS guidance on what you should do to resolve the matter.