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How to Avoid Tax ID Theft Scams

Published Friday Feb 21, 2020

How to Avoid Tax ID Theft Scams

Tax season is here, and so are the scammers. Con artists use Social Security numbers of unsuspecting Americans to file phony tax returns and steal their refunds. In honor of the Federal Trade Commission’s Tax Identity Theft Awareness Week, be on the lookout for this and other tax season scams.  

How the Scam Works

You file your taxes as normal and expect a refund from the IRS. Instead, you get a written IRS notice saying that more than one tax return was filed using your Social Security number. 

What happened? Scammers got ahold of your personal information, such as your Social Security number, address, and birth date. They filed your return early and received your refund before you even got around to filing. Tax ID theft is a particularly sneaky con because victims typically don’t realize they’ve been targeted until they try to file their taxes for real.

Scammers steal your tax information in several ways. You may have fallen for a phishing scam at an earlier time, used a corrupt tax preparation service, or had your information exposed in a hack or data breach. Sometimes tax scammers file in the name of a deceased person or steal children’s identities to claim them as dependents. 

How to Avoid Tax ID Theft Scams:

  • File early. The best way to avoid tax identity theft is to file your taxes as early as possible before a scammer has the chance to use your information.
  • Watch out for red flags. If you receive written notice from the IRS about a duplicate return, respond promptly. You may also receive an IRS notice stating that you’ve received wages from somewhere you never worked, or receive other notices that don’t actually apply to you. Another big red flag is if you receive a notice that “you owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return” (IRS). Contact the IRS if you have any suspicions that a return has been filed in your name.

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