I'm a Tax Fraud Victim. What Now?

Tax-related identity fraud is increasing. We know this firsthand because every year, from February through late April, the MyIDCare identity recovery team is deluged with calls from members dealing with tax refund scams. In other articles, we’ve talked about the importance of filing your taxes early to reduce the risk of identity thieves filing for you. But what can you do if you don’t have an identity protection service like MyIDCare and you become a victim? Here’s expert advice from our recovery team.​

People most often find out about tax refund fraud because their electronic filing is blocked, but they can also find out when the IRS sends a letter asking to confirm their identity or verify a tax return that was submitted. If you get one of these, just follow the instructions in the letter-usually making a call to the IRS or going to the IRS website to confirm your identity. ​

If your tax refund is blocked, the recovery process through the IRS is straightforward and free of cost, although it can take up to six months for a resolution with the IRS. If you haven’t already, go ahead and mail in your taxes and include IRS form 14039, the Affidavit of Identity Theft. Your taxes should eventually be accepted, and you’ll get any refund you have coming. The IRS may also give you a PIN code to use with the following year’s tax return. If a thief files without it, the IRS will not process the return. However, you may still be blocked from e-filing and have to mail in your taxes. ​

If the thief has filed state taxes in your name, our advocates advise sending a copy of federal form 14039 in with your state taxes. If you prefer, you can contact your state tax agency to ask about state-specific forms or procedures, but the federal form is accepted by most states and is often the fastest way to get the process started. Sometimes a thief will file in a state where you haven’t lived or worked. In that case, sending form 14039 and explaining that you did not work or live in that state will normally fix the problem. If it doesn’t, then you can call the state tax agency and ask their process to resolve the issue.​

The worst thing about tax fraud is not the fraud itself: it’s knowing that someone is using your Social Security number for crime and wondering how else they might misuse it. Our experts recommend that tax fraud victims file a 90-day fraud alert with Experian because Experian will let you view your credit report immediately. If you file with any credit bureau, they will automatically file alerts for you with the other bureaus. We also advise that victims of any type of identity theft faithfully check each of their credit bureau reports once per year and consider an identity protection plan, so they can count on timely alerts and expert recovery services if more complex types of identity theft crop up. ​