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.
A Chicago-based writer and editor, Eve Becker writes about personal finance, health, and other topics. She is a former managing editor of Tribune Media Services.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.