Identity theft happens. In fact, one in every 15 people (6.64%) were victims of identity theft in 2017. There are people out there who make it their job to steal from you, often in ways that you wouldn’t expect. And identity theft tactics are changing every day. One of the ways that you should be aware of is through your taxes. Never heard of tax identity theft? Well, it is a criminal activity that is a valid concern. In 2017, the IRS received 242,000 reports of tax identity theft. While this number is down from years previous, it is something to be aware of, and something you should bring up to your tax preparers.

Tax Identity Theft


Tax identity theft is when someone uses your stolen social security number to file a tax return to receive a fraudulent refund. If the criminal uses your social security number to file a return, you won’t find out about it until you file your own return. The IRS will then reject your filing since someone has already filed under your name and individual taxpayer ID. Another version of tax identity theft is if the person who has your social security number gets a job with your information. In that case, the income that the criminal makes won’t be taxed, and you will be audited instead since their income wasn’t reported.

Both cases, stolen identity refund fraud and employment-related tax identity theft, are a huge headache. Once you find that you are the victim of tax identity theft, you must report the issue to the IRS and prove your identity. Next, you have to complete Form 14039, Identity Theft Affidavit. You may be issued an identity protection personal identification number to prove you are you. Unfortunately, this may mean a delay in your return and lots of paperwork; tax fraud cases often take around a year to resolve. Luckily, timely tax preparation services can help you avoid financial identity theft in the first place, or help you solve it if it’s happened to you.

C&D | Tax Identity Theft


There are some things your tax professionals can do to help avoid tax fraud. Your tax preparation firm should have security practices in place to help protect your social security information. Here at C&D, we take your private information very seriously to avoid refund fraud. We utilize the latest technologies including dual-factor authentication to all our systems to eliminate the threat of hacking; we monitor websites, stay up-to-date with emerging threats, and pay close attention to record retention. C&D will keep your personal information safe and work with you through the process should a fraudulent filing occur.

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