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What to Do if Someone Files a Phony Tax Return in Your Name

The IRS could send you a letter about a suspicious tax return or a notice about changes to your online account

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The pandemic has made tax filing season complicated enough, but a bad actor who uses your information to file your taxes before you do could make it even worse.

There are different ways to find out if you are a victim of tax ID theft.

The IRS could send you a letter about a suspicious tax return or a notice about changes to your online account. The most common way people find out is when they try to e-file their taxes and their tax return is rejected.

“It’s a hassle because oftentimes you don’t know where you were truly exposed,” Mark Kapczynski said.

Kapczynski works with the company OneRep. The company helps people remove their personal information from the web. He said fraudsters looking to file your taxes need more than just your name and social security number.

“Let’s say they got through the dark web your social security number plus your name, that only gives them two bits of information that they can use, it’s not enough to file taxes, and commit real fraud,” Kapczynski said.

He says these bad guys scour the internet for information like your current and previous address, date of birth, employment information, and family info. By law, you can opt-out of having your information listed on people search websites.

“A consumer can go to each website, and remove themselves from each of those websites,” Kapczynski said.

Alejandra Castro with the IRS says the first step is to fill out the Identity theft affidavit - Form 14039.

“The IRS is going to verify the real taxpayer identity in order to process the tax return,” Castro said.

After you fill it out, you can submit it along with a paper return to the IRS. You will receive a letter from the IRS and then an investigation will begin.

“If the representative cannot verify the taxpayer identity by phone they are going to ask them to come to the nearest taxpayer assistance center in person,” Castro said.

This type of investigation typically takes 120 days, but Castro says due to the pandemic it could take as long as 260 days. To avoid this hassle, the taxpayer should consider taking proactive steps like registering for an IP Pin.

“ID PIN is a 6 digit number that is given to every taxpayer that has been the victim of identity theft. It is much harder for a fraudster to steal your info and file another return in your name,” Castro said.

Though you are still able to file your taxes during an investigation, you will not receive a tax refund until the IRS has finished the investigation.

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