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How to prevent tax ID fraud

With the 2021 tax season starting, it’s a good idea to take extra precaution to understand how to prevent tax ID fraud.

Tax identity fraud takes place when a criminal files a false tax return using a stolen Social Security number in order to fraudulently claim a refund. Identity thieves generally file false claims early in the year and victims are unaware until they file a return and learn one has already been filed in their name.

To help prevent tax ID fraud, the Federal Trade Commission (FTC) ‡ and Internal Revenue Service (IRS) ‡ offer the following tips.

Prevent Tax ID Fraud

  • File early – File your tax return as soon as you have all of your documentation.
  • File on a protected Wi-Fi network – Be sure you’re connected to a password-protected personal network.
  • Use a secure mailbox. Mail your tax return at the post office or an official postal box instead of your mailbox at home.
  • Find a tax preparer you trust. Get recommendations and research a tax preparer thoroughly before handing over all of your financial information.
  • Shred paperwork – Prevent tax ID fraud by shredding what you don’t need and file away the paperwork you do.
  • Beware of phishing scams by email, text or phone. Scammers may try to solicit sensitive information by impersonating the IRS. Know that the IRS will not contact you by email, text or social media. If the IRS needs information, they will contact you by mail first.
  • Keep an eye out for missing mail. Fraudsters look for W-2s, tax refunds or other mail containing your financial information.

If you believe you’re a victim of tax identity theft or if the IRS denies your tax return because one has previously been filed under your name, you should:

  • Alert the IRS Identity Protection Specialized Unit at 1-800-908-4490
  • Respond immediately to any mailed IRS notice and complete IRS Form 14039‡, Identity Theft Affidavit
  • Contact your bank immediately, to determine if any accounts have been opened without your permission or if your current accounts have been tampered with
  • Contact the three major credit bureaus to place a fraud alert on your credit records:
  • Continue to pay your taxes and file your tax return, even if you must do so by paper

More information about how to prevent tax ID fraud and tax identity theft is available from the FTC at ftc.gov/taxidtheft‡ and the IRS at irs.gov/identitytheft‡. To learn more ways to keep yourself protected online, visit UMB’s Security & Privacy page.

 

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