Filing taxes can be particularly challenging if you've recently moved, as it may increase your vulnerability to tax-related identity theft. This occurs when someone uses your Social Security number (SSN) to file a fraudulent tax return and claim a refund. Understanding how to safeguard your personal information and recognizing the signs of identity theft are crucial steps in protecting yourself.
Understanding Tax Identity Theft
Tax identity theft involves someone using your SSN to file a tax return without your knowledge, aiming to claim your refund. You might first notice this issue if the Internal Revenue Service (IRS) rejects your tax return, indicating that a return has already been filed under your SSN. Other warning signs include receiving tax documents from employers you haven't worked for or IRS notices about unreported income.
Steps to Protect Yourself
1. Notify the IRS of Your Address Change: It's essential to inform the IRS promptly about any address changes to ensure you receive all correspondence. You can do this by completing Form 8822, "Change of Address," and mailing it to the address specified on the form. Processing typically takes four to six weeks.
2. Secure Your Personal Information: Keep documents containing your SSN in a safe place, and avoid carrying them unnecessarily. Share your SSN only when absolutely necessary, and be cautious about sharing personal information over the phone or online.
3. Use Strong Online Security Measures: When using tax preparation software, enable two-factor authentication to add an extra layer of security. This makes it more difficult for scammers to access your accounts, even if they obtain your login credentials.
4. File Your Taxes Early: Submitting your tax return as early as possible reduces the window of opportunity for identity thieves to file a fraudulent return using your information.
What to Do If You're a Victim
If you suspect you're a victim of tax identity theft, take the following steps immediately:
1. Report the Theft: Visit IdentityTheft.gov to report the incident. The site will guide you through creating an IRS Identity Theft Affidavit (Form 14039) and developing a personal recovery plan.
2. Respond to IRS Notices: If the IRS sends you a notice indicating a suspicious tax return filed with your SSN, follow the instructions promptly to verify your identity and address the issue.
3. Monitor Your Credit: Regularly check your credit reports for unauthorized activity. Consider placing a fraud alert or freezing your credit to prevent new accounts from being opened in your name.
Preventative Measures
To further protect yourself, consider obtaining an Identity Protection PIN (IP PIN) from the IRS. This six-digit number, known only to you and the IRS, helps prevent unauthorized use of your SSN on federal tax returns. Remember, an IP PIN is valid for one year, and you'll need to obtain a new one annually.
By staying vigilant and proactive, especially after an address change, you can reduce the risk of falling victim to tax identity theft and ensure a smoother tax filing experience.