How to Prevent and Address IRS Identity Theft

Excise, corporate, gift, and estate taxes across the US is monitored and collected by the IRS along with tax law enforcement.

IRS identity theft poses a great threat to individuals and businesses as you might lose valuable tax returns for the said segments, as a large number of people in the USA lose their tax-refunds every year due to IRS ID theft. The incidents reported for identity theft to IRS are rising, as people you lose money due to frauds filing tax returns using your credentials.

What is IRS identity theft?

Scammers steal your name and Social Security Number (SSN) to get hold of your PII (personally identifiable information) to commit the crime. Then they file fake tax returns showing random values as income and deductions.

Though, small refunds go unidentified in the form of cheque, prepaid debit card on the thief’s address, electronic transfer to his account. But, the IRS identity theft process turns vicious when hundreds of fake tax returns are filed within a year.

Some fraudsters even pose as IRS through spam mails and lure you to prepare taxes at discounted rates, while stealing your IRS identity.

irs identity theft process

How to prevent IRS identity theft

Use a VPN for internet access

A virtual private network (VPN) is known as one of the safest ways to prevent IRS identity theft. Most IRS identity protection specialized units even recommend using secured networks such as VPNs for transacting online.

The identity protection feature of a VPN effectively improves the security measures for your personal data and spares you the exercise of dialing the IRS identity theft hotline for reporting an IRS ID theft.

Using a VPN ensures that your data transfer occurs in an encrypted format, which is tough for a scammer to infringe.

Which VPN service to choose

There are indeed many VPN services available in the market. But NordVPN stands out in the following aspects:

  • Be it browsing the internet to shop online or carrying out financial transaction using the bank’s website, NordVPN keeps your personal information intact. As your private information is not exposed to the internet and you anonymously access the internet through the VPN, there is hardly any chance of IRS identity theft or you contact phone number, email, or social accounts being hacked by fraudulent people. For scalable, secure and fast service there is nothing other than its VPN to lend you support.
  • NordVPN offers you to make online purchases from overseas websites without any demographic barriers. You can safely access public Wi-Fi using its VPN services.
  • NordVPN also enables you managing web traffic through mobile apps as well as supporting IRS identity theft protection for more than one device simultaneously.
  • Downloadable proxy extensions for Chrome and Firefox are also available to assist you in accessing its VPN services on Mac and Windows computers intuitively.
IRS identity theft: protection with vpn

Permanently erase your old phone or tablet

You may dislike your old iPhone or Android, and want to discard or sold it.

But such devices may contain the IRS information of yourself or your family. Hackers may use black technics to recover the information for malicious purposes.

You may say "I have deleted all the data". But the fact is: deleted information can be recovered. Creepy, isn't it?

How to permanently erase all important data (like IRS information) to prevent IRS identity theft from old devices?

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Update antivirus software and firewalls

IRS identity theft of PIN would cost you a lot, as IRS PIN is a confidential number to protect misuse of your SSN by miscreants.

An outdated antivirus system won’t be able to protect your computer or mobile from malware attacks and subsequently exposing your online transactions and IRS PIN. So, it is highly recommended to keep the security software up to date and stay assured about your tax refunds reaching the right place.

IRS identity theft: protect with antivirus software

Think twice before carrying credentials in your wallets or purse

You might fall prey to IRS identity theft, if you lose your SSN in anyway. Make sure to call the customer care phone number to report IRS identity theft, in case you notice malicious notifications in your mailbox or SMS texts.

Being a responsible tax payer, you need to protect your IRS ID from being lost or stolen. Make sure not to carry the Social Security card on your purse or wallet and don’t show it to anyone and everyone.

Get anti-spam and antivirus software in your electronic gadgets and protect your personal information from being leaked or stolen to miscreants.

IRS identity theft - protect credentials

Do not give personal information over the phone calls, mails, or messages

Obtaining your IRS ID is easy for the fraudulent people if you don’t pay close attention. Stay steer clear of mails, phone calls, or text messages that promise something dubious.

If they resemble your usual bank website, then also type the address yourself on the browser rather than tapping any link and lose your precious information and money on the way.

A bank/IRS/credit card company never asks you for PIN numbers etc. which is confidential to individuals. Know it’s a scammer if anyone pretends to represent the bank and seek your PIN number.

IRS identity theft - keep personal information secure

Check the credit reports as frequently as possible

Keep a close watch over credit reports regularly to catch anything suspicious. There are times you might miss a transaction which you have never done.

In case you come across any such incidents of IRS identity theft, then immediately file and affidavit for identity theft using the IRS identity theft Form 14039. Then attach a copy while approaching the police for reporting the IRS identity theft in the letter.

IRS identity theft: view credit reports often

Am I a victim of IRS identity theft?

It is tough to figure out if you have been victimized of IRS identity theft, unless you fall prey to it. But, there are some subtle warning signs to determine if you have become a victim of these scammers and lost your money that you rightfully deserved to receive as tax-returns.

Here are the things that should alert you of IRS ID theft:

  • When multiple tax refunds were filed on your name that you have no clue about.
  • When your federal benefits got cancelled or reduced as the agency got information about a change in your income.
  • IRS identity theft number would be required, when your IRS records imply receipt of more wages earned than what you actually deserve.
  • Additional taxes along with a refund offset on your name.
  • Collection actions taken against you for tax return, for a period/year you haven’t filed any tax refunds.
  • A retailer declines your credit card for payment.
  • A credit card that you never applied arrives at your address.
  • Suddenly you stop receiving credit card statements.
  • You were denied of credit or service requests.

How to address IRS identity theft if it happens

Usually IRS identity theft comes into notice, only after you have fallen a victim to it. Well! It is scary to be in such a situation, but you don’t have to worry about it. IRS will take care of the issue, which might take anywhere between 3 months to a year time to get resolved.

Report the case to IRS with the Form 14039

On the incident of IRS ID theft, you can always go ahead and file an affidavit using the Form 14039 with the IRS. After you are done filing it, take a printout of the form and follow the required processes. Attach your paper tax return to it or a police report stating the theft, if possible.

Prove your identity about past tax returns

You can address the IRS identity theft problem by producing your identity (SSN) to the IRS and show them your past tax return proofs. Once that gets confirmed, you will get the best assistance from them to restore your IRS identity.

Check in periodically with the IRS

Constantly keep in touch with the IRS, in order to avoid any trouble in the future. Request them to alert you in case something unusual pops up relating to your account.

Ask to be assigned an IP PIN for future tax return filing

To avoid future fraudulent activities on your behalf by miscreants, request to obtain an Identity Protection Personal Identification Number or IP PIN for your IRS ID. And, make sure not to share it with anyone, this will greatly help you to tackle with IRS Identity Theft.

File a complaint with the FTC

Filing a report with the FTC (Federal Trade Commission) through FTC Complaint Assistant is also a good option. Without it, it’s tough to authenticate any transaction (fake or genuine).

Place a fraud alert on your credit records

You can also approach the 3 leading credit bureaus in the USA, namely Equifax, Experian and TransUnion, to freeze credits for the said account or place a fraud alert. With this feature, it becomes easy to keep track of your credit scores and protect any kind of identity theft for anyone.

Contact your financial institutions or banks to verify your accounts and purchases

When in doubt about any transaction, small or big, approach the bank or financial institution you are associated to. Verify your transactions and online purchases to ensure that there is no chance of IRS identity theft with your accounts.

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