There are a lot of ways identity theft can mess up your life, none of them good. One of the most alarming is that it can \u2014 at least temporarily \u2014 get you into trouble with the IRS. For some unfortunate taxpayers, an envelope from the IRS might even be their first sign that their identity has been compromised. <\/p>\n\n\n\n
Tax fraud and identity theft often come hand in hand as a rather unsavory package deal. Here\u2019s how it works. <\/p>\n\n\n\n
Tax fraud can take a number of forms, varying with the criminals\u2019 expertise or the \u201cmarket segment\u201d they serve within the criminal community. Most forms of fraud start with the scammer obtaining someone\u2019s SSN<\/a>, most often obtained by scamming victims directly. Armed with that information, the criminal can either impersonate you, individually, or else mix and match data from multiple victims to create what\u2019s called a synthetic<\/em> identity<\/a>. <\/p>\n\n\n\n From there, scammers can use this stolen identity to do any of the following: <\/p>\n\n\n\n This isn\u2019t an exhaustive list, and there are variations on those themes, but you get the picture: Identity theft can blow up your relationship with the IRS in a hurry. It\u2019s low-hanging fruit for the criminals, because it will usually go unnoticed until tax season rolls around again. That gives them plenty of time to run their scam, take the money, and disappear. <\/p>\n\n\n\n For exactly that reason, your first sign of tax fraud often comes in the form of a letter from the IRS<\/a>. If the scammer has committed return fraud, for example, you might receive a notification that the agency has already received a return for the year under your SSN. In other cases you might be informed that someone else has already claimed your dependents, and that you therefore can\u2019t. <\/p>\n\n\n\n If the scammers have used your ID to commit employment fraud, you might receive a notice from the IRS that you have income that wasn\u2019t declared on your return. Alternatively, when you receive your 1099s for the year, you might receive documentation for income you didn\u2019t earn. You might also be informed that unemployment benefits have been claimed in your name, when you yourself have been steadily employed. <\/p>\n\n\n\n Needless to say, if any of these things should happen to you, it\u2019s the biggest and reddest of red flags and requires your immediate attention. Don\u2019t let it slide. <\/p>\n\n\n\n If you realize you\u2019ve been the victim of tax-related identity theft or tax fraud, your logical first step is to let the IRS know that something is amiss. If you found out about the problem when you received a letter from the agency, it probably included a contact phone number to use. Check it first with Spokeo\u2019s Reverse Phone Number<\/a> search (mail fraud and bogus IRS letters still happen), then call to explain the situation and set the correction process in order. <\/p>\n\n\n\n Otherwise, your best starting place is the Taxpayer Guide to Identity Theft<\/a> at the IRS, where you\u2019ll find pull-down menus that steer you toward IRS sites and documents that will be pertinent in your situation. This might include steps like completing an Identity Theft Affidavit<\/a>, or \u2014 in the case of return fraud \u2014 requesting a copy of the fraudulent return<\/a> (this is necessarily a lengthy process; if it were easy, then scammers could use it themselves to harvest people\u2019s data). The IRS also has its own Identity Theft Victim Assistance<\/a> site, which outlines resources you can leverage at the agency itself. <\/p>\n\n\n\n One important step you can (and should) take immediately is getting an Identity Protection PIN (IPP)<\/a>. Once a PIN is assigned, nobody can take any tax-related actions relating to your account without knowing that number, which effectively locks out scammers.<\/a> The IRS will send you a new one each year. You can also add security by requiring multi-factor authentication whenever you interact with the IRS, through methods such as a code sent to your phone or email address. <\/p>\n\n\n\n It\u2019s natural to fixate a bit on the tax implications of your stolen identity, but after setting things right with the IRS, there are some other things you should do. One of the first is reporting your case at the FTC\u2019s IdentityTheft.gov<\/a> website. Aside from putting your case on file with the appropriate agency, the site will also walk you through creating a recovery plan to help you minimize the impact of the identity theft. <\/p>\n\n\n\n That\u2019s important, because once your SSN is out there \u201cin the wild,\u201d you can be pretty sure it\u2019s going to be misused for things other than tax fraud. Identity theft takes a lot of different forms<\/a>, after all: All of them can be troublesome, and if someone uses your information to make health insurance claims or receive treatment (medical identity fraud<\/a>), it can potentially be life-threatening when you need treatment yourself. <\/p>\n\n\n\n Typical steps you might take include the following: <\/p>\n\n\n\n It\u2019s a lengthy checklist, but each step helps safeguard your financial profile. <\/p>\n\n\n\n So far, we\u2019ve talked about the proverbial \u201cpound of cure.\u201d But what about the \u201counce of prevention\u201d? While there\u2019s no way to completely protect yourself against identity theft, there are plenty of simple steps you can take to reduce the likelihood of being victimized. <\/p>\n\n\n\n For starters, you might want to think seriously about how much information you\u2019re randomly exposing online<\/a>. The sum total of those, and especially your social media posts, can leave you badly exposed to identity thieves. <\/p>\n\n\n\n A few common ways all of that information can go astray include the following: <\/p>\n\n\n\n Once your information is out there, it will circulate indefinitely in the criminal underworld. More importantly, as additional information leaks out over time, the better-equipped criminals will put it together and make it increasingly complete, to the point that they can impersonate you \u2014 individually \u2014 with full confidence.<\/p>\n\n\n\n The sum total of information you generate online is sometimes referred to as your digital footprint<\/em>, and there are plenty of things you can do to scale it back<\/a> and to protect the rest of your information<\/a> that remains in circulation. To get a grip on exactly how much of your information is out there, use Spokeo\u2019s people search tools<\/a> to search your own name, phone numbers, and your physical and email addresses. <\/p>\n\n\n\n Not to brag, but that can be a real eye-opener (we\u2019re good at what we do). Bear in mind, this is all information that\u2019s aggregated from public sources. Less scrupulous companies and outright criminals have access to a lot more information, either stolen from you directly or purchased on the internet\u2019s sketchy black markets<\/a>. <\/p>\n\n\n\n Getting the upper hand over identity thieves isn\u2019t exactly rocket science. It mostly comes down to making sure you\u2019re not among the easy targets, because criminals are all about the low-hanging fruit. <\/p>\n\n\n\n Things you can do include the following: <\/p>\n\n\n\n If you really want to cover your bases, consider a subscription to Spokeo Protect<\/a>, Spokeo\u2019s identity protection service. It can tell you when your key personal information is offered up for sale on the dark web, so you can take precautions before<\/em> your taxes are compromised or other bad things happen. You\u2019ll get real-time alerts by email, along with data breach alerts, protection against losses, and remediation support from a U.S.-based case manager, among other perks. <\/p>\n\n\n\n Ultimately, though, your best protection is nothing more elaborate than vigilance. Educate yourself about scams and internet safety, think twice before you post revealing information on social media, and maintain a skeptical attitude about incoming calls, emails and texts (especially the ones that contain links). <\/p>\n\n\n\n Taking those basic precautions isn\u2019t paranoia, it\u2019s just a thoughtful acknowledgment that \u2014 while they\u2019re not everybody \u2014 some people are indeed out to get you. Knowing what to look for, and how to prepare for them, can help you live your online life with confidence. <\/p>\n\n\n\n There are a lot of ways identity theft can mess up your life, none of them good. One of the most alarming is that it can \u2014 at least temporarily…<\/p>\n","protected":false},"author":112,"featured_media":26490,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[810],"tags":[],"class_list":["post-26488","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-identity"],"yoast_head":"\n\n
How to Know You\u2019re a Victim of Tax Fraud<\/h2>\n\n\n\n
Dealing with Tax Fraud<\/h2>\n\n\n\n
Other Steps to Rectify Fraud and Identity Theft<\/h2>\n\n\n\n
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Beyond the IRS: Identity Theft and the Bigger Picture<\/h2>\n\n\n\n
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Avoiding Identity Theft Proactively<\/h2>\n\n\n\n
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The Last Word on Protecting Yourself<\/h2>\n\n\n\n
Sources<\/h3>\n\n\n\n
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