Overview

Tax season is approaching and is the time of year when individual taxpayers prepare financial statements and reports from the previous year and submit their tax returns. In the United States, individuals must file a tax return by April 15 giving the IRS all reportable earnings. However, this is also the time of year for tax-related identity theft. Scammers are on the hunt for your identity in order to report false income data and steal your refund money.

In 2016, the IRS estimated that thieves attempted to steal $12.2 billion in tax refunds but only succeeded in earning $1.6 billion. If you want to avoid scammers this tax season, you can educate yourself on tax-related identity theft, the warning signs, and the tips to avoid this from happening to you.

Tax-related identity theft

When someone uses a stolen social security number (SSN) to file a tax return in order to receive refunds, this is called tax-related identity theft. Even if you owe taxes, this will not stop scammers from using fake income forms to trick the IRS to hand over a refund. Identity thieves only need your name, your SSN and your birthdate to file for a tax return in your name.

Signs you might be a victim

There are various warning signs that you might be a victim of tax-related identity theft. You will most likely hear it from the IRS or a tax preparer. Unfortunately, there are not any early warning signs of tax-related identity theft. Once your identity has been breached, a criminal could use it to file a fraudulent return. Below are the most common warning signs.

The IRS or a tax preparer notifies you if:

  • More than one tax return was filed using your SSN;
  • You owe additional tax;
  • Your records indicate you have received wages or income from an unknown employer;
  • They send you a letter by mail saying they have gotten a suspicious return that uses your SSN; or
  • Your return has been rejected due to the attempt of duplicate filing.

The red flags

File as soon as possible: The earlier you file, the less likely you will become a victim.

Hang up: The IRS will never ever call or text you. They always communicate by physical mail, so just hang up or block the number. Oftentimes, scammers will call and say they are from the IRS and that you owe money. The IRS also never threatens you with lawsuits or arrests.

Phishing emails: Con artists also pose as representatives from the IRS by email which can lure you into giving out your personal information. The IRS will never ask you to wire money, pay with a gift card or a prepaid debit card.

Avoid tax pop-up shops: If you end up hiring someone to prepare your tax returns, make sure they are legitimate. You should be wary of these tax preparation shops that you only see during tax season.

Delete or trash: You may have emailed or mailed your legal name, date of birth or even SSN for good reasons. It is smart to delete these from your inbox or shred any documents you may have that share this information. Most identity theft begins with looking through the trash.

Sign up for a full-year credit monitoring service: It is recommended that you hire a credit monitoring service that checks reports and scores regularly and can alert you to any changes or updates.

Wi-Fi: Use a private Wi-Fi network if you are e-filing.

Prevention tips

Here are some prevention tips for your protection against tax-related identity theft.

  • Keep your SSN private or hidden;
  • Protect all your devices with security software;
  • Always use strong passwords; and
  • Verify everything even if it seems legitimate.

Lone Star Legal Aid is a 501(c)(3) nonprofit law firm focused on advocacy on behalf of low-income and underserved populations. Lone Star Legal Aid serves the millions of people at 125% of federal poverty guidelines that reside in 72 counties in the eastern and Gulf Coast regions of Texas, and 4 counties of southwest Arkansas. Lone Star Legal Aid focuses its resources on maintaining, enhancing, and protecting income and economic stability; preserving housing; improving outcomes for children; establishing and sustaining family safety and stability, health and well‐being; and assisting populations with special vulnerabilities, like those who have disabilities, or who are elderly, homeless, or have limited English language skills. To learn more about Lone Star Legal Aid, visit our website at www.lonestarlegal.org.

Media contact: Clarissa Ayala, cayala@lonestarlegal.org.