According to a recent press release from Federal Trade Commission (FTC), tax identity theft was more common than any other form of identity theft in the United States for 2014. The commission received 109,063 complaints about tax identity theft, which accounted for approximately one third of all identity theft cases reported last year.
Tax related identity theft often goes undetected until the IRS notifies the tax filer that more than one return has been filed or there is a sign that the filer received wages from a fictional employer. In a recent report, the Treasury Inspector for General Tax Administration (TIGTA) revealed that it often requires an average of 278 days for the Internal Revenue Service (IRS) to resolve identity theft cases. Furthermore, stolen information can lead to recurring incidents of fraud.
For individuals, a sampling of warning signs that tax identity theft occurred include:
- An individual tax return was rejected because a social security number was already used
- IRS notices are received after all tax issues for the individual have been resolved
- An IRS notice shows wages received from an employer that unknown to the filer
For businesses, a sampling of warning signs that tax identity theft occurred include:
- The tax return was only accepted as an amended return
- The receipt of IRS notices regarding employees unknown to the filing company
- The receipt of IRS notices relating to a fictitious or closed business
To assist those victimized by tax identity theft, the IRS has already issued approximately 1.5 million Identity Protection Personal Identification Numbers (IP PINs). An IP PIN is a six-digit number assigned each year in December those tax filers with resolved identity theft cases. The IP PIN should be used on federal tax filings.
As a reminder, the IRS does not contact taxpayers by phone, text message, or email to request personal or financial information. Initial contact from the IRS should be through official correspondence sent via U.S. mail.
Suspicious online or email scams can be reported to the IRS at firstname.lastname@example.org. For phishing scams by phone, fax, or mail, call 800-366-4484. IRS impersonation scams can be reported by calling 800.366.4484.