Most people have a love-hate relationship with tax season. On the one hand they love it because it generally means a tax refund is coming their way. However, they hate doing their taxes. Those who especially hate it are those who have complicated returns or those who are doing their taxes themselves. However, even worse than going through all the time and trouble to prepare your taxes is getting a notice from the IRS that says your claim is rejected because your taxes have already been filed. Someone has stolen your identity and snagged your refund.
The most important thing to do when you realize you have been the victim of fraud or identity theft is to keep calm. Gather all of your paperwork and all of the documents that support your case. Remember, you did nothing wrong, and the IRS will be willing to work with you to correct this problem. You will need to alert them to the identity theft right away, so head over to the IRS website and check out their ID fraud section or call them directly at (800) 908-4490.
There will be many questions going through your head, not the least of which is, “How could this have happened?” The answer, unfortunately, is that it was probably not very hard for the thief to take your tax refund. The most common way is that someone found out what your social security number is, and then filed your tax return. Instead of a nice refund check coming your way, it went to them. However, there are quite a few other ways that scam artists will con people out of money. They could steal your dependent’s SSN, and claim them on their return. Then, when you go to file your taxes, your return will be rejected because your dependents are already claimed on another return. A less popular way is to steal your SSN, and then get a job earlier in the year using your identity. However, the fraudster will claim “9” on his or her W-2 keeping 100% of the earnings in the check. Then, when tax time comes, you will receive a notice from the IRS that you have unclaimed income.
In this day and age of the internet, gleaning social security numbers is not too hard to do. In fact, a lot of people lose their number when they use a fake tax preparation service. This service will offer to do your taxes for free, but in the end they just filter off the refunds into their own pockets. Other ways are through phishing scams, or even stealing a physical piece of paper that had your SSN printed on it (remember to shred all documents with personal information on them).
What happens now is that you have to file an amended return. You have to wait even longer for your refund check, and you have to file an affidavit that states you were the victim of fraud.
Between 2008 and 2012 the National Taxpayer Advocate Services saw an increase in identity theft of more than 650%. While it is not encouraging to see so many people becoming victims, it is encouraging to know that you are not alone in your battle. You have had some minor setbacks, but now you are even more aware of the problem. In the future, be alert. Keep a close eye on your personal information, and remember that the IRS will never request personal information over email. Only use a trusted tax preparer, and if something seems fishy or strange, take your documents and walk away.