Tax season is also cyber-criminal season. So it's up to you to be proactive, smarter and quicker than any identity thief. No matter who you are, these criminals work overtime-- especially early in the tax season-- trying to file fraudulent tax returns before you file a real one.
Watch for these 6 signs that you may be a victim of tax-related identity theft:
1. Your electronically filed tax return is rejected. This is the No. 1 sign of fraud, indicating that the criminal may have filed with your information before you did. You may get a message saying a return with a duplicate Social Security Number (SSN) has been filed.
First, check to make sure you didn't make a mistake on your end, like transposing numbers. This is more common than you may think. Also, make sure one of your dependents, like your college student, didn't file a tax return and claim themselves as a dependent.
If you've double-checked your information and still can't e-file because of a duplicate SSN, reach out to a tax pro quickly and complete Form 14039, Identity Theft Affidavit. You'll need to attach this to the top of a paper tax return and mail it to the IRS. The faster you can clean this up, the better.
2. You receive a letter from the IRS asking you to verify your information. Take this seriously. In an effort to step up the fight against fraud, the IRS will hold suspicious tax returns and send you a letter to verify that it's actually you filing with your name and SSN.
If it's a red flag to them, it should be to you too. If you didn't file the tax return, follow the instructions and contact the IRS immediately.
3. You learn about a job you never knew you had. Seriously. If you receive income information from an employer you've never heard of, report this. Employment-related ID theft involves the use of your SSN by someone-- generally an undocumented worker-- to falsify employment at your expense.
4. You receive a tax refund that you didn't request. Most of us are thrilled to get any refund. However, if you receive a paper refund check by mail that you know isn't yours, act quickly. The criminal (not the smartest tool in this shed) intended to have it sent somewhere else.
Return this check to the IRS and write "Void," in the endorsement section, and include a note explaining why you are sending it back. If it's direct deposited into your account, contact your bank and ask them to return it to the IRS. For more information, get to a tax pro or Search IRS.gov for "Returning an Erroneous Refund" for more information.
5. To your surprise, you receive a pre-paid debit card in the mail. Criminals will try to use your name and address to create an account for re-loadable prepaid debit cards. If you didn't request this type of card, this is yet another red flag that someone may have your information. Cancel this card immediately. Also, alert the credit reporting agencies--Equinox, TransUnion and Experian--to freeze your account so that an ID thief can't apply for an account or a mortgage in your name.
6. You are mailed a tax transcript that you didn't ask for. Even more red flags should be flying if you didn't request a tax transcript and received it anyway. Sometimes identity thieves try to test the validity of your personal data, not just for tax fraud, but to steal more of your information.
Remember, the IRS will never request personal or financial information via email, text messages or social media. Likewise, no legitimate IRS agent will ever call you with threats of lawsuits or arrests.
The good news is many of us in the tax industry are working with the IRS and the states to better protect you. Check out more information, including how to report ID theft at Identity Protection: Prevention, Detection and Victim Assistance.