Even early-birds who make a habit of filing their tax returns long before the deadline likely won’t start thinking about it for a few months. However, they may want to pay attention to this: the Internal Revenue Service has recently taken steps to help all tax filers recover more easily if they become victims of identity theft.
What does my tax return have to do with identity theft?
If a thief manages to steal your identity, they may attempt to open financial accounts in your name and use them to steal thousands of dollars. In the worst-case scenario, a victim may not realize that something is amiss until they are already significantly in debt for purchases that they did not make.
One of the most common ways to commit identity theft is to steal a Social Security Number. Often, thieves can get these numbers from important personal documents that have not been properly shredded before disposal. With your Social Security Number in hand, a thief can go even further and attempt to file a tax return in your name.
Unfortunately, this happens to a handful of taxpayers every year, and it can often be extremely difficult to overcome. Thieves can use this tactic to steal tax refund money that you were expecting, while also making it so you cannot file a legitimate tax return.
What is the IRS planning?
If you believe that someone has filed a tax return under your name, it is important to take action as soon as possible.
The IRS is trying to make this easier by loosening some of its privacy rules, which previously made it more challenging for victims to establish a paper trail of what happened to them. Last month, the agency announced that it would work with state tax agencies and the tax filing industry to share more filing information in order to stop fraud. Now, the IRS says that it will allow taxpayers to get a copy of fraudulent returns filed in their name.
“We know that identity theft is a frustrating process for victims, and we are taking aggressive steps to stop fraudulent returns before they are processed,” the IRS wrote on its website. “We understand victims want to know more about the information used on the fraudulent returns using their Social Security Number.”
This won’t eliminate every privacy rule. Most notably, the IRS still won’t allow those who are listed as dependents on fraudulent filings to obtain a copy.
Still, the rule change will help primary filers gain a better understanding of what kind of personal information has been stolen. This is a key step in preventing more fraud from happening in the future.
If you have concerns about identity theft, be sure to invest in a credit monitoring service, which can notify you of certain activities that may indicate fraud. This can give you much-needed peace of mind, allowing you to rest assured that you’re taking important measures to safeguard your identity.