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Child Identity Theft and Tax Fraud: What You Need to Know

Written by Eve Becker on April 18, 2012 in Credit  |   24 comments

How can child identity theft involve tax fraud? Identity theft occurs when someone, without your permission, uses your or your child’s personal information such as name, Social Security number, or other identifier to commit fraud or other crimes. Identity theft, and child identity theft in…

How can child identity theft involve tax fraud?

Identity theft occurs when someone, without your permission, uses your or your child’s personal information such as name, Social Security number, or other identifier to commit fraud or other crimes.

Identity theft, and child identity theft in particular, can cause a host of problems in the credit and financial worlds. One growing concern is government document fraud, including tax fraud.

A thief can take a stolen Social Security number and create a fraudulent tax return with a false employer and income. A thief can also use stolen Social Security numbers to falsely claim children as dependents on his or her own tax return in attempt to get the Earned Income Tax Credit or other credits.

Identity thieves often attempt to submit a fraudulent tax refund early in the filing season. Once the thief receives the refund check, he or she can quickly turn it into cash at a check-cashing store. When the identity theft victim goes to file taxes, the IRS assumes that the taxes were already filed and that the victim has already received both the tax credits and refund.

A thief can even look up the names and Social Security numbers of recently deceased children in the Social Security Death Master File. The thief then can claim those children as dependents on his or her fraudulent tax returns. When the parent files a tax return claiming the child as a dependent in the year that the child died, he or she is unable to do so, piling injustice on top of grief.

Uncovering tax-related identity theft

You usually won’t even realize you are victim of tax-related identity theft until you get a notice from the IRS. That notice might tell you that someone has already filed using your, or your child’s, Social Security number.

The IRS also might say that:

  • More than one tax return was filed in your name.
  • Your children were already claimed as dependents on a different tax return.
  • You have a balance due or a refund offset, or you have had collection actions taken against you for a year in which you did not file a tax return.
  • You received wages from an employer for which you have not worked.

How to respond to tax identity theft

If you receive a notice from the IRS, open it and respond immediately to the name, address, or phone number on the notice. Often, people see a letter from the IRS and get nervous about it, so they delay opening it, an IRS spokesperson says.

If you have lost personal information or had it stolen from you and you think you are at risk of identity theft, contact the IRS immediately so it can secure your tax account. Call the IRS’s Identity Protection Specialized Unit toll-free at 1-800-908-4490 or visit irs.gov/identitytheft. You will also need to fill out the IRS Identity Theft Affidavit, Form 14039; follow the instructions provided on the form.

If you have an unresolved issue related to identity theft, or if you have suffered a significant hardship as a result of the administration of the tax laws, you can also contact the IRS Taxpayer Advocate Service.

How can you minimize the chance of becoming an identity theft victim?

  • Don’t carry your Social Security card or any document with your Social Security number on it. Only disclose your Social Security number to a business when it is required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls, installing anti-spam/virus software, updating security patches, and changing passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail, or on the Internet unless you have initiated the contact or you are sure you know with whom you are dealing.

24 comments

  1. LATONIA BRADLEY says:

    yes i would like to know how to stop my child ssi number used with out me knowing

  2. Anonymous says:

    My kids socials were used by someone on their tax return. As soon as I found out I went to the IRS and filed identity theft and turned in my return because I could not e file. The irs agent attached copies of my kids socials and birthcertificates. How long does this kind of thing take to get fixed and for me to receive my tax refund? I need the money really bad..

    • EFX Moderator, EM says:

      Oh no! It’s good that you caught it and it sounds like you have already taken the necessary steps to get it resolved. The agent at the IRS would know best the time frame for amending the tax returns, and new tax laws are creating some delays at the IRS. If you get an update from the IRS agent about the timeline, would you mind posting it here? It sounds like it’s an issue facing a few people. Thanks.

      • Mahrleen Jones says:

        How do I stop someone from filling taxes using my child social security number??? I need to use my own kids as my dependents for my taxes this year Nd I dont want the person trying to filled using them can you help give me some information on what I need to do?

  3. Jennifer says:

    Dependent fraud. .. my kids were used on someone’s tax return. How long does it take for something like this to get fixed?

    • EFX Moderator, EM says:

      Jennifer, I’m sorry to hear that. The IRS is facing delays in processing returns due to new tax forms so it’s hard to say how long it’ll take to correct the associated tax returns. Be sure to let the IRS know right away, and an agent there should give you a time frame. It sounds like a few people are facing the same issue (see above comment). If you could share with us what you learn, I’m sure other parents would appreciate it. Thanks for posting.

  4. DE says:

    the IRS sucks. They are the most incompetent government agency that exists. My daughter’s ssn was compromised in 2010; someone filed using her number. I did EVERYTHING the IRS asked. In 2011, both mine and my daughters was used. Again, did everything the IRS asked. They finally labeled my SSN as a victim of identity theft (which took roughly 11 months to do) and sent me a “special” pin to efile. Oh, but guess what? They can’t do anything to protect my daughter’s SSN because she is under 18. So by the time the IRS issued my pin and I could file, my daughter’s social was already used. In just about 3 years the IRS has done nothing to PREVENT this or try to go after who did this. I wish I could come up with more descriptive words about how much the IRS sucks and what a waste of tax payer money – but I will stick with they SUCK. I mean poor excuse for a government agency (and I work for the government).

    • me says:

      Had the same issue, someone used my son’s in 2010, we did everything they said to do, they finally issued him a pin this year, a month later they sent a letter of intent to seize property for the refund which the thief got. they are re-investigating. The person on the phone didn’t want to admit they had two tax forms and that he could see we sent in all of the proper forms. What a joke.

  5. ELady says:

    The same thing happened to our son. It’s been 7 years since the first incident (yes, you read this correctly – the FIRST incident), and it still continues. The IRS has a file of supporting documents from us which is probably about 2 inches thick by now, yet they still cannot figure this out. We have finally involved our state congressman, who is appalled at the incompetency of the IRS. “Me,” how did you finally get IRS to issue your son a pin – this is what we’ve been asking for years, but they won’t do it.

  6. Ellen says:

    My son died and someone stole his identity and claimed him on their return. I filed IRS Form 14039 http://www.irs.gov/pub/irs-pdf/f14039.pdf . That’s the first thing you need to do immediately. Also, report to local law enforcement. However, I too – one year later am still waiting on the IRS. I have yet to talk to one competent person who even seemed to care that my son who died at age 22, had his ID stolen. Sickening.

  7. Anonymous says:

    im a victim of identity theft and I received a identity theft pin number. Does this number protect my children/dependents because the came back claimed already this year. I thought this pin covered myself and my dependents. please help!!

    • EFX Moderator_KB says:

      In addition to filling out an Identity Theft Affidavit Form 14039 and requesting an Identity Protection PIN, you should be sure to file a police report with your local authorities so you can document to both the IRS and your creditors that you and your dependents are victims of identity theft. You can also file a complaint with the Federal Trade Commission’s identity theft hotline (877-438-4338), and you can request a fraud alert from one of the three credit reporting agencies. This fraud alert prevents new credit accounts from being opened without your authorization. Click hereto learn more details about how to respond to tax identity theft. I hope this helps and thanks for posting.

  8. Anonymous says:

    My son identity ssi number was stolen and used on some one else tax return and I was not able to e file how can i report that ?

    • EFX Moderator_KB says:

      Unfortunately, children are prime targets for tax fraud because they’re easy to take advantage of. If you think your child might have tax issues related to identity theft because his or her Social Security number or other personal information was stolen, let the IRS know as soon as possible. Contact the agency’s Identity Protection Specialized Unit at (800) 908-4490 and visit irs.gov/identitytheft. In addition, if the IRS sends you a notice alerting you to possible tax fraud, respond immediately to the name and number printed on the notice to set up an identity theft report. Please take a look at this blog post for more information: http://blog.equifax.com/credit/identity-thieves-use-childrens-information-to-commit-tax-fraud/

  9. Single mom says:

    So I was happy when tax season got here because I could file my taxes this year. Well I e-filed and my taxes were submitted the day the irs started accepting taxes. Only to find out they were rejected because someone claimed my daughter on their taxes. Funny thing is nobody else has the legal right to claim her but me. No body I know would even think of doing something like that to us I thought. So I started thinking and I could only think of one person who would. Which is why I stopped being friends with him. So I did some digging and found out he somehow got her info and used it on his taxes. Butthen I also found out he’s done it for 3 years now. So now I know I can send in everything by mail and I’m sure I will get the refund cuz I’ve got the proof and he doesn’t. But what concerns me is if he can’t claim her then he might try selling her infoor having someone else file with her on their taxes. I don’t understand why it isn’t automatic to put a restriction on the stolen CHILDS identity to prevent any reoccurring incidents like that from happening again. The only thing that makes me feel a tiny bit better is that I know who used my daughter’s info. I just hope he has to pay back all 3 years and he learns a lesson to not do it again for any reason.

  10. Emanuel says:

    I had a child this year but i cannot claim her because my mother claimed me. But does not support and did not have my permission to claim me, considering im over 19 and have a job,lying to the governmen and to me,what can i do so she cannot claim me anymore.Also get my tax return?

  11. Alfred John Jones says:

    If the deceased child’s birth certificate was marked with deceased that would stop people abusing the record. parent’s when they have to register their loved one deceased they should have the right to have the birth record marked.I have been campaigning for 6 years in the UK to have the records marked. Face book Stop identity theft of children’s birth certificates please take a look.

  12. D. Lindsey-Jones says:

    I have had problems with someone filing my child for the third time. The first 2 times I paper filed and sent all the info in IRS requested. Both years I was not able to get a return until October. The following year I got smart and filed my taxes on the very first day I could file. The year after that I did the same thing. Everything was cool. However, this year I had to wait until I got off the offset list to file my taxes. Low and behold, someone has beat me to the punch and filed my child again. I wanted to know how could I stop this from happening, so I called the number listed above. I was told there was nothing I could do but go through the process I’ve gone through before to amend my tax return. It’s because children are claimed as dependents and are not filing themselves. So This has to continue to happen every year? Why isnt there something that can prevent parents from having this problem year after year?

  13. tiara hudson says:

    What do I do about someone using my baby ssn without my premission on there taxes I’m in need of infromation I need help

    • EFX Moderator_KB says:

      Tiara, unfortunately your baby may have been a victim of child identity theft. Children are prime targets because they’re easy to take advantage of. You should contact the IRS as soon as possible. Contact the agency’s Identity Protection Specialized Unit at (800) 908-4490 and visit irs.gov/identitytheft. In addition, if the IRS sends you a notice alerting you to possible tax fraud, respond immediately to the name and number printed on the notice to set up an identity theft report. You can learn more here: Identity thieves use children’s information to commit tax fraud. I hope this helps and thanks for posting.

  14. Denise says:

    Someone used my identity and filed my information on their taxes,I contacted the IRS and they told me I had to go online at IRS.GOV.


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