Tax Identity Theft: How It Happens and Ways to Prevent It

Avoid Tax Identity Theft

Tax identity theft has been the most common form of identity theft reported to the Federal Trade Commission (FTC) for the past five years. It happens when someone files a phony tax return using your personal information — like your Social Security number — to get a tax refund from the IRSIt also can happen when someone uses your Social Security number to get a job or claims your child as a dependent on a tax return.  

How do identity thieves get personal information? 

Tax identity thieves acquire your personal information in several ways. For example, they can get your information by:   

  • Stealing your trash  
  • Stealing mail from your home or car  
  • Sending phony emails that look like they’re from the IRS and ask for personal information  
  • Stealing it from hospitals, nursing homes, banks, and other businesses   

Read alsoDid the IRS Call Me? Or is it a Scam?

How to prevent tax ID theft  

Here are some things you can do to protect yourself from tax ID theft:  

  • Everyone with a SSN or ITIN (Individual Taxpayer Identification Number) is eligible and should consider applying for an Identity Protection PIN (IP PIN) from the IRS. An IP PIN is a six-digit number that prevents someone else from filing a tax return using your SSN or ITIN.
  • File your tax return early in the tax season, if you can, before identity thieves do  
  • Use a secure internet connection if you file electronically. Don’t use insecure, publicly available Wi-Fi hotspots at places like coffee shops or a hotel lobby  
  • Shred copies of your tax return, drafts, or calculation sheets you don’t need 
  • Respond to all mail from the IRS as soon as possible  
  • Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will first contact you by mail.  
  • Don’t give out your Social Security number (SSN) or Medicare number unless necessary. Ask why it’s needed, how it’s going to be used, and how it will be stored.   
  • If your SSN has been compromised, contact the IRS ID Theft Protection Specialized Unit at 800-908-4490  

My return has already been filed without my consent. What should I do?

If a return has been filed in your name, you’ll need to fill out Form 14039 Identity Theft Affidavit for victims of tax identity theft and file a paper tax return for the current year.

For more instructions and who to contact if you think you’ve been a victim of tax identity theft, read: What should I do if I am a victim of Identity Theft?

How do I know if my ID was stolen? 

Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in their name, or IRS records show they received wages from an employer they don’t know.

If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 800-908-4490.  

Also visit IdentityTheft.gov, the federal government’s one-stop resource to help you report and recover from identity theft. You can report identity theft, get step-by-step advice, sample letters, and your FTC Identity Theft Affidavit. These resources will help you fix problems caused by the theft. 

More information about tax identity theft is available from the FTC at ftc.gov/taxidtheft and the IRS at irs.gov/identitytheft.  

How to recognize and report a tax scam

When the IRS contacts people about unpaid taxes, they usually do it by postal mail, not by phone. Report IRS impostor scams to the Treasury Inspector General for Tax Administration (TIGTA) online or at 800-366-4484, and to the FTC at ftc.gov/complaint.  

This article was last updated on March 11, 2022.