Your Top Questions about Tax Identity Theft, Answered

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As your account holders file their 2021 tax returns, it is an unfortunate reality that some may fall victim to tax identity theft. This year, additional transactions with the IRS during the COVID-19 pandemic have provided increased opportunities for criminals to steal personal information and receive an even greater payout from their theft. This month, we’re sharing information that will help your account holders become more aware of this critical issue and how to protect themselves.

According to the IRS, identity related tax scams occur when someone uses a stolen Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) to file a fraudulent tax return, claiming a refund. The piece below covers four questions your account holders should be asking to better protect themselves this season.

What to Know About Protecting Yourself During Tax Season

During last year’s tax season, it seemed unlikely that we would still be dealing with the COVID-19 pandemic when filing again this year. However, as the world continues to react to the virus, scammers are adapting their techniques to steal your money. With the increase in the number of transactions with the IRS this year (including child tax credit pre-payments, economic stimulus payments, and federal unemployment), the door has also become more widely open to thieves attempting to steal your tax benefits and your identity.

This month, we’re focusing on your top questions about tax identity theft, and what you can do to protect yourself.

What is tax identity theft and how does it work?

According to the IRS, tax-related identity theft occurs when someone uses your stolen personal information, including your Social Security number, to file a tax return claiming a fraudulent refund. A successful scammer can create an online return using just your Social Security number, even if they don’t spell your name right. Once the fraudulent account is established, they can not only use it to file taxes on your behalf and receive your refund, but also to receive future relief payments from the federal government. The criminals are adept at using accounts that funnel money into pre-paid debit cards so that it is untraceable and unrecoverable.

Who is at risk?

In short, everyone is at risk of falling victim to tax identity theft. Thousands of Americans are impacted each year. As with other forms of identity fraud, children and the elderly are most commonly targeted, but with the increase in tele-working during the last year, more people also found themselves falling victim to online-based fraud. Once employees are outside of the firewalls that are typically found in corporate environments, hackers are more easily able to gain access to devices and the information stored within them.

What do you need to watch out for?

Your first sign of tax identity theft this season will usually be a letter from the IRS after filing your return, informing you that one has already been filed using your Social Security number. Year-round, expected payments that are not received are a sign to watch for. Also be mindful of any tax reporting documents from employers you never worked with. Rather than ignoring them, follow up to ensure someone else hasn’t stolen your identity and taken a job using your information. Here is a quick list of suspicious activity involving the IRS that may be identity theft, from the Taxpayer Guide to Identity Theft.

Be alert to possible tax-related identity theft if:

  • You get a letter from the IRS inquiring about a suspicious tax return that you did not file.

  • You can’t e-file your tax return because of a duplicate Social Security number.

  • You get a tax transcript in the mail that you did not request.

  • You get an IRS notice that an online account has been created in your name.

  • You get an IRS notice that your existing online account has been accessed or disabled when you took no action.

  • You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.

  • IRS records indicate you received wages or other income from an employer you didn’t work for.

  • You’ve been assigned an Employer Identification Number but you did not request an EIN.

What should you do to protect yourself?

Now that you are armed with information about what tax identity theft is and how to recognize it, there are several actions you can take to protect yourself from becoming a victim.

  • Protect your personal information by keeping your Social Security number or tax identification number at home in a secure location. When asked for these numbers, be skeptical and verify that it is a legitimate need. Additionally, keep your home computer security software up to date, and run regular software updates on your connected devices (including the seemingly less risky ones like smart watches).

  • File your taxes as early as possible each year - in short, beat the scammers to it. As soon as you have the necessary documentation, go ahead and take care of this right away.

  • Visit the IRS online account website to create your account now, and monitor it regularly. While a lot of personal information is required to create the account, once you have done so, you can monitor your tax activity throughout the year, including if a return has been filed in your name. Through your online IRS account, you can then request an Identity Protection PIN (IP PIN). Once established, the PIN must be included on your federal tax return in order for it to be processed as valid.

Remember, the IRS will never initiate contact with taxpayers by email, text or social media to request personal or financial information including your taxpayer Identity Protection PIN, nor will they ever threaten with lawsuits or arrest.

While you’re now armed with the information to protect yourself in the future, remember that as an <EMBEDDED ACCOUNT> account holder, you have access to our Identity Theft Recovery Advocates. If you feel that you or a dependent have fallen victim to identity fraud of any kind reach out to our trained professionals for support in regaining what you have lost.

Social Media Content

Use the social posts below during the month of March to educate your account holders about tax identity theft.

Post #1: During tax season and throughout the year, be aware of the increasing risk of tax ID theft. According to the IRS, tax identity theft occurs when someone uses stolen personal information to file a fraudulent tax return. #YourProtectionPartner #TaxIDTheft

Post #2: Anyone can fall victim to tax identity theft, and your money could be at risk. Protect yourself by leaving your social security number or tax identification number at home in a secure location and making sure you have updated your online security. #YourProtectionPartner #TaxIDTheft

Post #3: Receiving a tax form from a company you’ve never worked for could be a sign that someone has stolen your identity. If your tax return is rejected as a duplicate, that’s also an indicator that a return has been fraudulently filed in your name. Don’t ignore these warning signs - follow up with the IRS immediately. #YourProtectionPartner #TaxIDTheft

Post #4: File your taxes as soon as possible in order to keep your refund out of the hands of scammers. We also recommend creating an account at and establishing a secure IP PIN to further protect yourself. #YourProtectionPartner #TaxIDTheft