What to Do If Someone Files a Tax Return in Your Name

It’s tax time in the United States and, whether you’re looking forward to a refund or dreading the money you owe (ahem, like me), you should be on the lookout for signs that someone else is using your Social Security number to receive a tax refund.

It’s not an uncommon crime. The Justice Department even has a name for it: Stolen Identity Refund Fraud (SIRF). It usually involves someone using your Social Security number to file a tax return for an arbitrary amount of money to get a refund.

Having a false income reported might affect future loans and other financial transactions.

Fortunately, the IRS, state agencies and tax preparation professionals have been working to decrease the prevalence tax identity theft. There was an 80% decrease of taxpayers who filed IRS identity theft affidavits between 2015 to 2019.

But there were still around 90,000 cases of tax fraud in 2020 according to the Federal Trade Commission (FTC) Consumer Sentinel Division, which tracks fraud reported by consumers.

How do you Prevent Stolen Identity Refund Fraud?

The primary way to minimize your risk is to not become the victim of identity theft. Don’t carry your Social Security card with you. Don’t give out your Social Security number over the phone. Monitor your bank accounts and credit score.

Another way to reduce your risk is to file your taxes as soon as possible.  

When someone is using your Social Security number to file taxes, only the second tax return will be flagged by the IRS. If you’re first, that will at least ensure you receive your refund. The person with your information will have a difficult time convincing the IRS that they are you.

How do you know you’re the victim of Stolen Identity Refund Fraud?

One of the first indications that your Social Security number was used to file taxes is a letter (not an email or phone call or social media DMs) from the IRS asking about a tax return you did not file.

Another sign would be that your e-file is rejected because it uses a duplicate Social Security number.

If either of these happen, you still need to file for a tax return.

You’ll need to respond to the IRS’s written notice but also prepare you return and complete IRS Form 14039. It’s an Identity Theft Affidavit.

In addition to that, you’ll still need to pay your taxes if you owe money. You should still get money back if you’re owed money by the IRS.

You’ll also receive an Identity Protection Personal Identification Number (IP PIN) to use for future filing.

It’s a headache, and the number one way to avoid it is to protect your identity and file your taxes early. Though, taking these steps is a good practice anyway.

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