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Lane Keeter, CPA

Partner: Tax Consulting, Estate Planning, and Heber Springs Managing Partner

What to Do if a Tax Return is Filed Fraudulently in Your Name

A few weeks ago, this column addressed tax fraud awareness and provided some tips on how to prevent identity theft and protect your assets. That has prompted people to ask me what someone should do if they become a victim and a tax return is falsely filed in your name.

Given the concern out there, I thought it would be helpful in this article to give you some guidance on what to do should you become the unfortunate victim of tax fraud.

And the concern is legitimate. According to the IRS, over 237,500 taxpayers filed affidavits with the IRS in the first nine months of 2016 reporting that they had been victims of identity theft. During that same time frame, the IRS stopped 787,000 identity theft returns that had sought more than $4 billion in refunds.

Ironically, as I wrote this article today, I received an urgent message from a client that said he appears to have become a victim and wondered what he should do next.

To combat this, the IRS, tax preparers and software companies have made a number of changes and stepped up measures to combat tax fraud. This includes things like requiring stronger and more frequent changes of passwords, multifactor authentication log-ins, etc.

The IRS has new security measures for all online filing, and some states are now requiring driverís license numbers to be shown on returns as an additional form of identification to prove you really are who you say you are.

The problem, of course, isnít just that the thieves are trying to make off with illegitimate tax refunds. Itís much bigger than that. If someone can file a tax return pretending to be you because they have your social security number, then you are at risk for other forms of financial damage.

So what should you do if you become aware that you are the victim of identity theft tax fraud? Here are some things to need to do as soon as possible if this happens to you:

  • File Form 14039, Identity Theft Affidavit. If you receive a letter from the IRS or otherwise suspect you have become the victim of identity theft, you should complete and mail this form to the IRS with a copy of your driverís license, Social Security card or passport.
  • Put a credit freeze on your accounts. Call the three major credit bureaus (Experian, TransUnion, and Equifax) and ask that your credit be frozen. Now no one can request new credit in your name. Keep in mind that if you apply for a new cell phone or utility account, or otherwise agree to a credit check, you'll have to lift the freeze long enough for the check to be done.
  • Check your credit card accounts. Make sure no one has charged anything to your credit cards, changed your address or otherwise done anything you did not authorize. Consider changing passwords to online accounts and deleting your credit card information from online shopping sites.
  • File a police report. Your fraud may be part of a larger local fraud scheme. The more information the police have, the better chance they have of cracking the criminal enterprise. Depending on the size of your local police department, there may even be a division that deals with financial crimes or ID theft.
  • File a report with the Federal Trade Commission. The FTC also has helpful information on its website,, for taxpayers who face this situation, and you can even make a report there.
  • Watch for scams. The IRS will not contact you via email or phone to ask for financial information. Do not give out any personal information to phone callers and do not click on links in emails that purport to come from the IRS. Only respond to paper mail correspondence from the IRS.
  • Get a PIN for tax filing. You can add an extra layer of protection to your tax filing if you use an IRS-provided personal identification number. You can request a PIN if the IRS has invited you to or if you filed your tax return from Georgia, Florida or the District of Columbia. But once you get a PIN, you canít file without it.
  • Only work with reputable tax preparers. Tax preparers have been both victims and perpetrators of scams. If you hire someone else to do your taxes, hire someone with good references and experience. Hopefully, you will never become a victim of identity theft or tax fraud, and will never need this advice. If you do, however, act on these action items sooner rather than later.

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