Identity thieves want your tax refund. Here’s how to protect yourself

Imagine going to your mailbox, eagerly looking to receive your tax refund. Instead, you get a letter from the IRS that makes your heart sink: "You filed more than one tax return" or "Someone has already filed using your information." Welcome to the world of tax fraud.

In 2023, the IRS flagged over 1 million potential identity theft situations and reported over 12,000 fraudulent tax returns. As we are currently in tax season, with the final day to file on April 15, it’s important to stay vigilant for potential identity theft and tax fraud while filing your 2024 taxes.

How to avoid tax fraud

With tax fraud due to identity theft on the upswing, it is crucial to understand the signs and take precautions to keep yourself safe. Typically, when a scammer is stealing your identity to file a fraudulent tax fraud, they have to steal your Social Security number and file the return under your name.

One way to ensure this doesn't happen is by filing your taxes as early as possible before a scammer has a chance to file ahead of you. However, if you are one to procrastinate filing your taxes, here are other precautions you can take to help keep your identity safe this tax season:

Protect documents that include personal information

When you file your taxes, you need specific personal information, such as your Social Security number. It is always good practice to keep important documents, such as your Social Security card or past tax records, in a safe, hidden place such as a lock box. And, if you choose to get rid of past tax records, don't just throw them out. Make sure you shred them so there's less chance they will fall into the wrong hands.

Protect your online information

Many people use online services, like TurboTax, to complete their taxes each year. If you are one of them, use two-factor authentication to keep your information more secure. Two-factor, or multifactor authentication, adds an additional step after entering your username and password to help validate your identity. This second step helps protect your account if an unauthorized user obtains your username and password and uses it to gain access to your account.

Be cautious of spam phone calls, text messages and emails

A common way that scammers try to reach you is through fraudulent phone calls, text messages and emails. No one is immune from these scary, aggressive tactics, and the scammers may threaten you with arrest unless you pay them ASAP with a prepaid debit card.

If you receive a phone call or other type of message from someone claiming to be from the IRS or your financial institution asking for personal information, always question whether they are you they claim to be. To be safe, before handing over any personal information, call your financial institution or the IRS to ensure the original phone call or message is legit.

What to do if you get a fraudulent call or email

Keep this in mind: The IRS will initially write you a snail mail letter about any problems. The IRS will very rarely call or email you to ask for your financial or private information. Have concerns about your tax bill? Do not respond to any numbers or addresses you receive. It's better to email IRS.gov or call the IRS directly at 800-820-1040 and talk with an agent.

What to do if you fall victim to tax fraud

If you're a tax refund identity theft victim, the IRS recommends you complete the IRS Form 14039. You should also respond immediately to any IRS notice and file a complaint with the FTC at identitytheft.gov. You can still get your refund, but you'll have an abundance of paperwork to fill out to confirm your identity and often a long wait for your money, typically six months. Also, to ensure none of your other accounts are affected, keep a close watch on your checking account, credit card bills and credit report, and change your login passwords.

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