When it comes to tax-related identity theft, there are two victims — the taxpayer, who may not receive the refund he or she earned, and the IRS, which may be the first to detect the fraud.

Tax-related identity theft happens when someone steals your Social Security number to file a tax return that claims a bogus refund. In 2014, the IRS halted more than $15 billion in fraudulent refunds. And over the past few years, almost 2,000 people have been convicted of refund-related fraud connected to identity theft.

The IRS doesn’t want you to be a victim of this crime any more than you do. So the agency offers these tips on how to avoid this theft and what to do if you are a victim:

  1. Guard the card. Don’t carry your Social Security card with you, and provide the number only when you know who’s asking and it’s absolutely necessary to reveal it.
  2. Avoid scams. If someone calls out of nowhere and demands an IRS payment, it’s probably a scam. The IRS will never call and demand immediate payment unless it has already mailed you a bill.
  3. Report identity thefts. If you think your Social Security number has been stolen, report it to police and contact credit bureaus so they can freeze your accounts.
  4. File an affidavit. File IRS Form 14039 Identity Theft Affidavit after you’ve filed a police report.
  5. Get an IP PIN. If you or the IRS believe you’re the victim of identity theft, the agency will issue you an Identity Protection Personal Identification Number, a unique, six-digit number you’ll use to file your tax return.
  6. Help an agency out. If you know or suspect someone is committing tax fraud, report it to the IRS by visiting IRS.gov. For more information on how to report identity theft, visit Taxpayer Guide to Identity Theft.

If you have questions, contact an MCB Tax Advisor at 703-218-3600 or click here. To review our tax news articles, click here. To learn more about MCB’s tax practice and our tax experts, click here


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