The tax deadline is quickly approaching! The only worse feeling than actually doing your taxes is finding out they were done incorrectly… especially due to a scammer.
For this Fraud Friday, we are looking at tax identity theft. This is when someone uses your Social Security number (SSN) to file a fraudulent tax return and claim your refund. One of the warning signs of this scam is if the IRS rejects your tax return after you file it.
Keep reading for tips on how to protect yourself while filing online and what to do if someone steals your tax refund.
Filing Online
If you use online tax preparation software (such as TurboTax, H&R Block, TaxAct, or TaxSlayer), protect your accounts by using multi-factor authentication (MFA). Requiring two or more credentials to log in makes it harder for scammers to get into your account. So if somehow they get your username and password, MFA would ideally block them from logging in.
Early Bird Gets the Return
Some people will always wait until the last minute to file their taxes. However, when preventing tax identity theft, it is best to file as early as possible. This gives scammers less time to try to steal your tax return.
How to Spot the Scam
Even if you take these precautions, it’s possible that someone might still use your SSN to steal your refund. While a rejection from the IRS is a red flag for this scam, it could also just mean that your filing has missing or incorrect info. So, pay attention to the IRS’s reasoning for rejection. If they say there is more than one tax return filed in your name, that’s tax identity theft.
If You Fall Victim to Tax Identity Theft:
1. Report the fraud at IdentityTheft.gov. This will generate an FTC Identity Theft Report, an IRS Identity Theft Affidavit, and a personalized recovery plan.
2. Submit the IRS Identity Theft Affidavit through IdentityTheft.gov to initiate an investigation.
3. Follow the steps in your personalized recovery plan — such as freezing your credit and monitoring your credit reports.
We hope this article helps prevent tax identity theft from happening to you and your loved ones. If it does happen, don’t panic — return to this article to take swift action and minimize damages. Share this with a friend to help spread the word! Be sure to join us back here again soon for more Fraud Friday tips.