The scam works when online filers that go through the IRS website usually expect a refund. Instead, a written IRS notice arrives in the mail, stating that more than one tax return was filed using their Social Security number.
What happened, Scammers got hold of personal information, typically the account holder’s Social Security, number, address, and birth date. They filed your return early and received your refund before you even got around to filing. Tax ID theft is a particularly sneaky con, because victims don’t realize they’ve been targeted until they file their taxes.
Scammers steal tax information in several ways, such as a phishing scam, a corrupt tax preparation service, or the information was exposed in a hack or data breach. Sometimes tax scammers file in the name of a deceased person or steal children’s identities to claim them as dependents.
How to Avoid Tax ID Theft Scams
- File early. The best way to avoid tax identity is to file your taxes early as possible, before a scammer has the chance to use your information.
- Watch out for red flags. If a written notice from the IRS arrives in the mail about a duplicate return, respond promptly. Or, is an IRS notice arrives stating you received wages from somewhere you never worked or receive other notices that don’t apply to you, contact the IRS immediately. Another big deal is if you receive a notice that “additional taxes or owed, the refund will be offset or a collection action is being taken against you for a year you did not file a tax return” (IRS). Contact the IRS if you have any suspicions that your identity has been stolen.
- Protect your Social Security number. Don’t give out your SSN unless there’s a good reason, and you’re sure who you’re giving it to.
- If you are a victim of ID theft, consider getting an Identity Protection Pin (IP PIN). This is a six-digit number, which, in addition to your Social Security number, confirms your identity. Once you apply, you must provide the IP Pin each year when you file your federal tax returns. Visit IRS.gov for more information.
For More Information
If you are the victim of tax identity in the U.S., contact the IRS at 1-800-908-4490 and consider filing a complaint with the Federal Trade Commission (FTC) at ftc.gov/complaint or by calling 1-877-FTC-HELP. The FTC also offers a personalized identity theft recovery plan at identitytheft.gov
If you’re targeted by this scam or other scams, help others avoid the same problem by reporting your experience to BBB.org/ScamTracker. You can also call BBB of the Upstate office that covers all ten counties in the Upstate at 864.242.5052 or email email@example.com to discuss the scam situation and be sure to ask before instead of after becoming a victim.
By International Association of Better Business Bureaus
Submitted to Ten at the Top by Vee Daniel, BBB of the Upstate President/CEO