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Tax Refund Identity Theft

If you’ve procrastinated getting your 2017 taxes filed, hopefully it is on your “to do” list this week, because the due date is coming up soon!  With the number of new data breaches we hear about on the news—791 data breaches for the first six months of 2017– it is important to be aware that identity theft doesn’t have to be related to credit cards; tax refund theft occurs, too (Fleming, 2018).  This can negatively affect your credit, level of stress, and future financial opportunities, such as buying a house.

If an identify thief has your name and social security number, they can create a fake W2 to get a tax refund or a job under your name.  A credit freeze is not enough to prevent tax refund theft. The IRS reported that in 2015, there were more than 1.5 million fake tax returned filed, with claimed refunds totaling over $5 billion (Fleming, 2018).

How do you know if you’ve been a victim?  If you receive a notice from the IRS that says you were paid by an employer that you don’t work for or if they send you something saying that a tax return was already filed under your Social Security number, you must contact the IRS right away to report the fraud: http://www.irs.gov/identitytheft  or 1-800-908-4490, as well as file a police report.  You will also need to send proof of your identity, so be ready to send a copy of your Social Security card, driver’s license, or passport.  Keep detailed records of all phone calls and mail sent.  If your social security number was falsely used, contact the Social Security Administration Fraud Hotline at 1-800-269-0271.

The best way to prevent tax refund fraud is by filing your taxes early so that an identity thief doesn’t have a chance to beat you to it!  If you are a procrastinator at heart, this alone should be motivation enough to get it done sooner next year.

References:

Fleming, M.  (2018).  Eye on Extension: Tax Identity Theft Awareness Week.  Retrieved from https://alamosanews.com/article/eye-on-extension-tax-identity-theft-awareness-week

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