Recent Tax Updates

Tax Identity Theft Change and Growth

July 22, 2015

Identity theft is evolving. It is no longer just about an individual’s social security number, date of birth, name, and address. As financial institutions, government agencies, and companies that have an individual’s sensitive information have increased their authentication requirements for an individual to access their online accounts, identity thieves have increased the amount and type of information they are obtaining.

Identity thieves are now seeking to obtain a person’s credit history, personal history, and financial history that includes prior year tax information. Identity thieves are then using this information to gain access to an individual’s online accounts and/or commit tax identity theft by filing a federal and/or state tax return in the individual’s name and making the return look similar to returns filed in prior years.

It is more important than ever to help educate and remind taxpayers of the need to protect their personal and financial information. Doing so will help taxpayers avoid becoming a victim of identity theft in general, and of tax identity theft more specifically.

Below are some tips to help individuals avoid becoming a victim of identity theft:

  • Limit the amount of personal information you include on any social media site.
  • Protect your personal computers by using firewalls, anti-spam/virus software, and be sure to update your computers with any new security patches.
  • Use strong passwords on websites that contain your financial information or other sensitive personal information.
  • Do not give out your Social Security Number unless it is absolutely necessary.
  • Do not routinely carry your Social Security card or any document with your SSN on it.
  • Check your credit report annually.
  • Check your Social Security Administration earnings statement annually.
  • Do not give personal information over the phone, through the mail, or the Internet unless you have either initiated the contact or are sure you know who is asking.
  • Be cautious about using public computers and Wi-Fi.

If a taxpayer informs you that they have been a victim of identity theft and they have not contacted the IRS about this, you should have the taxpayer contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. Once the taxpayer has contacted the IRS, the IRS will ask the taxpayer to complete Form 14039 (IRS Identity Theft Affidavit).

Once the IRS confirms that the taxpayer is a victim of identity theft, the taxpayer will be issued an Identity Protection Personal Identification Number (IP PIN) which the taxpayer will need to enter on their federal income tax return. This number helps the IRS confirm that this is the taxpayer’s federal tax return and there will be no delay in processing their tax return or tax refund.

If a taxpayer receives a notice from the IRS indicating that they might have been the victim of identity theft, the taxpayer should follow the instructions on that notice.

For more information see the following: