Identity theft comes in many forms, which can make it difficult to predict what is going to happen if someone gets hold of your information. One of the most common forms of identity theft is tax-related identity theft. As a victim of tax identity theft, you may experience delays in getting your tax refund.
So what is tax identity theft and why is it a big deal?
Tax-related identity theft happens when your Social Security Number (SSN) is used by someone else to file tax returns with the goal of obtaining a tax refund payment before you notice. When this happens, the IRS may flag the return on suspicious grounds.
The effects of tax identity theft can be devastating for businesses and individuals alike. While a swiped tax refund is the most common motivation for identity thieves, fraudsters may also use your stolen identity to seek employment, an act that can greatly impact you.
What to do if your tax ID is stolen
Here are three things you need to do as soon as you learn that you are tax identity theft victim.
- File your return
You still have to meet the filing and payment deadlines set by the IRS. File a paper return if you are unable to submit your return electronically. Be sure to send any money you owe based on your return.
- Provide an affidavit
Before submitting your paper return, print and fill out form 14039, Identity Theft Affidavit. You will need to submit this form alongside your return.
- Wait for a response from the IRS
The IRS will acknowledge receipt of your affidavit within 30 days. In some cases, the response may come with a 5071C letter, which outlines how you should verify your identity and prove that you have indeed filed your return.
Tax-related identity theft can be frightening, especially if you are already stressed and frustrated by your taxes. If you fall victim to SSN identity theft, do not delay taking action to correct it. The sooner you take action, the sooner the IRS will step in and the easier it will be stopping the bad guys from committing further fraud with your tax identity.