Protecting Your Identity At Tax Time

February 27, 2019

When it comes to protecting my identity, I’ve had to be super-vigilant since a young age due to my common last name. It was nerve-racking as a teenage college student to be served a subpoena by a sheriff’s deputy and not understand what was happening or why.

A case of mistaken identities

It turned out that a collection agency was trying to collect a sizable, unpaid hospital bill for someone else with an identical name. Thanks to my parents and my unique Social Security number, they were able to squash the matter pretty quickly. Since then I’ve learned there are at least eight other women within 50 miles of me with identical full names — one even shares my same date of birth.

As a result, I’ve learned the importance of protecting my personal information after multiple court summons, mixed up medical records, and attempts at stealing my identity. That’s becoming harder and harder as identity thieves become more sophisticated.

Protecting your tax refund

As we prepare for tax season, there are a number of steps we can take to protect ourselves from identity theft and someone stealing our tax refund.

  • The IRS suggests that anyone who’s been the victim of a data breach should keep in touch with the company that lost your data. Verify exactly what data was stolen and what they are doing to protect you (credit monitoring services, for example). Not all data breaches result in tax-related identity theft.
  • File your income taxes as soon as you you’re able to beat someone else to the punch – a scammer can only steal your refund if they file before you for that year.
  • If your Social Security number was compromised and the return that you e-File is rejected as a duplicate, you should submit IRS Form 14039, an Identity Theft Affidavit. Also use this form if the IRS informs you that you may be a victim. You can fax the form to the IRS at the number provided or mail it along with a paper version of the tax return that got rejected. (yes, the IRS is still that old-fashioned in some ways)
  • Within 30 days of submitting Form 14039, you’ll get a letter from the IRS acknowledging your report. In some cases, you may be asked to prove your identity using their written instructions. It’s important to take those ASAP and follow them closely.
  • The IRS will work with the Identity Theft Victims Assistance team to make sure your latest return is processed and issue a refund, if applicable. They’ll also review past returns to see how many tax years might have been impacted, and they’ll remove any fraudulently filed returns from your record. An identity theft indicator will be placed on your record indefinitely and you may be given a special PIN annually to be included on future tax returns.

Typically, these cases can be resolved in 120-180 days or more than a year, depending on the circumstances. If we have more government shutdowns in the future, it will likely take longer.

Therefore, I’m going to take advantage of this frigid winter to get my tax information organized and get my return e-Filed as soon as possible to reduce the risk of someone sneaking in before me. And yes, e-Filing with the IRS is a safer way to protect your personal information than mailing a paper copy, plus your refund will be processed that much faster!