Tax-related identity theft is on the rise. Every year, thousands of Americans find themselves in an uphill battle with the IRS, trying to prove their identity and get the tax refunds they’re rightfully due. You see, your social security number is the key to everything in this country. If someone gets a hold of it, they can impersonate you, get a job under your name, or even file a tax return as you and claim a refund. In fact, according to the IRS, the agency identified more than 42,000 fraudulent tax returns and about $227 million in fraudulent refunds by March of last year.
When It Happens to You
If someone files a return under your SSN, the IRS will kick back your real return once you file it, and you’ll get a letter saying you’ve already received your refund. If someone has used your SSN to get a job, that employer will report the person’s income to the IRS, and you’ll get a notice that you didn’t report these wages on your return and that you owe taxes on them. Either way, it means you’re out money – either in refund form or straight out of your pocketbook.
To make matters worse, it could also mean someone has infiltrated your life in other ways, opening credit cards or bank accounts in your name, securing loans or taking other actions that could destroy your credit and your future.
How to Fight Back
Your first step to fighting tax-related identity theft is to contact an experienced tax adviser to guide you through the process. You’ll need to work with the IRS to prove your identity and get your proper returns filed, and going it alone can often mean costly and time-consuming mistakes. Your best bet is to bring in professional help.
You’ll also want to pull your credit reports and identify any other accounts or loans that may have been opened in your name. Then, alert your bank and file fraud alerts with one of the major credit reporting agencies (Equifax, Experian, TransUnion).