Tax Identity Theft: What You Can Do to Protect Yourself

Tax identity theft is when a criminal uses your Social Security number to file a tax return on your behalf to claim the tax refund. Unfortunately, you come to know about the theft when you try to file your return and get a message that one is already filed with your SSN. There were many cases of tax identity theft in the past but new regulations by the IRS and state tax agencies have caused these fraudulent filings to drop by 50% in 2016.

Warnings Signs of Tax Identity Theft

Although you might not realize that tax identity theft has occurred until you try to file your tax return but it's important to watch out for the warning signs that indicate that someone is using your SSN or other sensitive information. Following are some warning signs of tax identity theft:

• There is a new account or credit inquiry on your credit report that you did not open or recognize.
• You are getting calls from debt collectors about an existing loan you are not aware of.
• According to the IRS records, you have received wages from an unknown employer.
• W2's, bank statements or other sensitive information was issued but you did not receive any email about them.

Tips to Protect Yourself from Tax Identity Theft

There are many ways to prevent your identity from being stolen and protect yourself from becoming a victim of tax identity theft. Follow these tips to keep your identity and sensitive information protected:

• Submit your tax return early before someone else files with your SSN.
• Don't give any sensitive personal or financial information over the phone, email, or social media.
• Beware of websites that do not have "www.irs.gov" as thieves create sites that look identical to the IRS e-services page.
• Use a strong password while filing your tax return electronically.
• Save all your information on an external drive after filing your tax return and delete it from your computer.
• Put a fraud alert on your credit reports to monitor your credit.

If you find out that someone has used your SSN to file a tax return, contact the IRS Identity Protection Specialized Unit at 1-800-908-4490 and report the tax identity theft. Send them a copy of your police report or an IRS ID Theft Affidavit Form 14039 and proof of your identity.

Acting fast and taking proper steps and precautions will help you avoid tax identity theft and receive your tax refund without any problems.