The pandemic has made tax filing season complicated enough, but a bad actor using your information to file your taxes before you could make things worse.
There are different ways to find out if you are a victim of tax identity theft.
The IRS may send you a letter about a suspicious tax return or a notice about changes to your online account. The most common way people find out is when they try to file their taxes electronically and their tax return gets rejected.
“It’s a problem because often you don’t know where you’ve really been exposed,” Mark Kapczynski said.
Kapczynski works with the company OneRep. The company helps people remove their personal information from the web. He said fraudsters looking to file your taxes need more than your name and Social Security number.
“Let’s say they got through the dark web your social security number plus your name, that only gives them two pieces of information they can use, it’s not enough to file taxes and commit real fraud,” Kapczynski said.
He says that these bad guys scour the Internet for information such as your current and previous address, date of birth, employment information, and family information. By law, you can opt out of having your information listed on people search websites.
“A consumer can access each website and opt out of each of those websites,” Kapczynski said.
Alejandra Castro of the IRS says the first step is to complete the Impersonation Affidavit – Form 14039.
“The IRS will verify the actual identity of the taxpayer in order to process the tax return,” Castro said.
After completing it, you can submit it along with a paper return to the IRS. You will receive a letter from the IRS and then an investigation will begin.
“If the representative cannot verify the taxpayer’s identity over the phone, they will ask the taxpayer to come to the nearest taxpayer assistance center in person,” Castro said.
This type of investigation typically takes 120 days, but Castro says due to the pandemic it could take up to 260 days. To avoid this hassle, the taxpayer should consider taking proactive steps like registering an IP PIN.
“ID PIN is a 6-digit number that is given to every taxpayer who has been a victim of identity theft. It’s much harder for a fraudster to steal your information and file another return on your behalf,” Castro said.
Although you are still able to file your taxes during an investigation, you will not receive a tax refund until the IRS completes the investigation.