Tax Tips If You Have Had Your Identity Stolen
Tax identity theft occurs when someone files a fraudulent tax return using your information and can go undetected until you receive a notice from the IRS. If this happens, you’ll want to fill out Form 14039 immediately. Learn more about tax identity theft, how you can protect yourself, and what to do if someone files a fraudulent tax return.
The One Big Beautiful Bill that passed includes permanently extending tax cuts from the Tax Cuts and Jobs Act, including increasing the cap on the amount of state and local or sales tax and property tax (SALT) that you can deduct, makes cuts to energy credits passed under the Inflation Reduction Act, makes changes to taxes on tips and overtime for certain workers, reforms Medicaid, increases the Debt ceiling, and reforms Pell Grants and student loans. Updates to this article are in process. Check our One Big Beautiful Bill article for more information.
Key Takeaways
- Recognize signs of identity theft by watching for IRS notices about duplicate returns or unexpected tax balances.
- If you get an IRS notice about suspicious activity, respond right away and fill out Form 14039, the IdentityTheft Affidavit.
- You can support your IdentityTheft Affidavit by providing clear photocopies of documents like your passport or driver's license.
- Report identity theft to other agencies through identitytheft.gov or by contacting the Federal Trade Commission to limit further fraud.
How can you tell your tax account is affected?
Typically, most victims are unaware that their information has been taken, so, in the case of income tax fraud, your first indication of trouble may be a notice of irregularity from the Internal Revenue Service. Such irregularities could include:
- More than one return has been filed in your name.
- Your account shows a balance due, refund offset or collections action for a year you were not required to file a return.
- IRS records indicate income from an employer you've never worked for.
- Information filed with the IRS shows more income than you actually earned.
- You had state or federal benefits canceled or reduced due to an income change report that you didn't make.
Protecting your tax file if identity theft is suspected
When you receive a notice from the IRS regarding activity about which you are unaware, respond immediately. Then, fill out Form 14039, the Identity Theft Affidavit, which informs the IRS of your experience with identity theft.
Form 14039 also is used in cases where an event occurs that may make you vulnerable to identity theft, such as a lost or stolen wallet, or other misuse of personal information that may allow a thief to file a return in your name. Support your identity theft affidavit with clear photocopies of one or more of the following personal identification documents:
- passport
- driver's license
- Social Security card
- any other valid U.S. federal or state-issued ID
You can also contact the IRS Identity Protection Specialized Unit by phone if you have reason to suspect you may be vulnerable to an identity attack.
TurboTax Tip:
Protect yourself from identity theft by safeguarding your Social Security number, checking your credit report regularly, and securing your personal electronics.
Other steps to take when identity theft occurs
Your Social Security number is usually the key piece of information used by thieves, so notifying other agencies of the theft or potential theft of your SSN may limit your exposure to fraudulent action using your information. You can report identity theft through the www.identitytheft.gov website or by contacting the Federal Trade Commission by phone at 1-877-438-4338.
The website provides detailed information about identity theft and its prevention, as well as offering tips and guidance to defend against identity theft. Strategies are organized by action level, from immediate reporting to extended steps for reporting and repairing damage to your name and credit history.
Protect yourself from identity theft. If you have not been the victim of identity theft, there are steps you can take to minimize your exposure, reducing your chances of ever experiencing problems:
- Be careful about sharing your Social Security number. Treat it as privileged and confidential information. Don't give a business your SSN unless there is a legitimate reason to.
- Don't regularly carry your Social Security card or other documents that include it in your wallet or purse; secure these documents in your home.
- Check your credit report periodically to scan for irregular activity, protect personal computers and other personal electronics with firewalls and security updates, and change passwords regularly.
- Do not give SSN or other personal information out over the phone, unless you initiate or expect the call, from a reliable business or contact.
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