The first is refund fraud. With refund fraud, the scammers use your stolen name and social security number to file a fake tax return with the IRS. Of course, this tax return results in a tax refund payable to the thieves. The big problem for you happens when you file your real return. After the IRS realizes it’s been scammed, they often will freeze your refund until it can all be sorted out. In addition, there is a major hassle associated with trying to clear things up.
The second fraud is employment fraud. The crook uses your stolen information to obtain employment. Victims of this fraud get a notification from the IRS that they have unreported income. Again, it takes months to sort out the mess and get things corrected.
Here is a summary of the tips to avoid being a victim of tax identity theft:
· File your taxes through a secure internet connection or take them directly to the post office.
· Be careful about giving your Social Security number to anyone. Ask them why they need it and what they are going to do with it.
· Shred old tax returns and documents that you are not required to keep.
· Ask to see the license and credentials of your tax preparer. Get recommendations and research them before you give them your personal information.
· The IRS DOES NOT email or text tax payers. Do not respond to emails claiming to be from the IRS. Do not provide personal information in response to an unsolicited email.
· Check your credit report annually. You can check your report at annualcreditreport.com.
· You can get more information at irs.gov/identitytheft