They Filed a Tax Return in Your Name: The Nightmare You Didn’t See Coming

Tax identity theft is a growing threat that could cost you your refund and lead to months of financial and legal headaches. Imagine filing your tax return only to discover that someone has already submitted one in your name. Suddenly, you're left dealing with the IRS over a fraudulent return while a criminal walks away with your hard-earned refund.

How They Do It:

Fraudsters file early, often before you’ve even thought about taxes. Using your Social Security number and other stolen personal information, they submit a tax return and claim your refund. The IRS, unaware of the fraud, processes the return, and by the time you file, your legitimate return is flagged as a duplicate.

The Impact on You:

• Delayed Refunds: The fraud can take months to resolve, leaving you in financial limbo without your expected refund.
• IRS Scrutiny: You’ll have to prove the fraudulent return wasn’t yours, a frustrating and time-consuming process.
• Credit and Identity Issues: Your personal information is in the hands of a criminal, which can lead to further identity theft, impacting your credit and requiring ongoing vigilance.

How to Protect Yourself:

1. Obtain an IRS IP PIN: The IRS offers an Identity Protection Personal Identification Number (IP PIN), a six-digit number that locks your tax return. Without the PIN, no one—not even you—can file a return using your Social Security number. You can apply for this through the IRS website.
2. File Your Taxes Early: Fraudsters try to beat you to filing, so the sooner you file your legitimate return, the less likely they are to succeed.
3. Monitor Your Credit: Regularly check your credit reports to ensure there’s no suspicious activity. You’re entitled to a free annual report from each of the three major credit bureaus, and monitoring services are also available.
4. Use Strong Security Practices: Ensure your online accounts are secure by using strong, unique passwords, enabling two-factor authentication (2FA), and keeping sensitive documents (like your Social Security card) in a safe place.
5. Shred Sensitive Documents: Avoid throwing out anything with personal information, such as bank statements or tax-related paperwork. Shred them instead to prevent dumpster-diving identity thieves from accessing your information.
6. Watch Out for Phishing Scams: Fraudsters often use phishing emails or calls posing as the IRS to collect your personal information. The IRS will never initiate contact via email, text, or social media. Always be cautious of unsolicited messages.

What To Do If You’re a Victim:

If you suspect someone has filed a tax return in your name, act quickly:

1. File IRS Form 14039 (Identity Theft Affidavit) to report the issue.
2. Contact the Federal Trade Commission (FTC) to report the identity theft.
3. Request an IP PIN from the IRS to protect future returns.
4. Freeze your credit at all major (and minor) reporting bureaus and set up fraud alerts.

Don’t Wait Until It’s Too Late

Tax identity theft is a real threat that can strike when you least expect it. By taking proactive steps—like securing an IRS IP PIN, filing early, and maintaining strong security habits—you can protect yourself from the financial and emotional toll of this growing problem.