December 1, 2023
Depositphotos 29270411 750

Depositphotos 29270411 750

Are you receiving strange requests for money or information on your tax returns? If so, it's time to take action.

CURIOUS DORA – How to Deal with Tax Fraud: What to Do If Someone Has Filed Taxes in Your Name

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Depositphotos 29270411 750
Depositphotos 29270411

Tax Season is around the corner, which means it’s also fraud season. Every year, thousands of people become victims of tax fraud, and the problem is only getting worse.

The good news is that there are steps you can take to protect yourself from becoming a victim of tax fraud. The bad news is that if someone has already filed taxes in your name, you have a bit more work to do.

Disclaimer: Dora’s Corner and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. (For more info, please see our Terms of Service page.)

What Is Tax Fraud?

Tax identity theft occurs when someone uses stolen personal information to file a fraudulent refund. The IRS uses criminal investigation to identify these types of fraudulent tax refund claims and works hard to combat tax fraud in general.

Individuals are encouraged to report any suspicious activity related to taxes so that appropriate action can be taken. If someone has filed taxes in your name without your permission, it is important that you take steps immediately to protect yourself from further damage.

Taxpayers should take preventative measures, such as watching out for identity theft schemes in which criminals use stolen personal information to submit false returns using another person’s name. In addition, taxpayers should be aware of the IRS Questionable Refund Program (QRP), which identifies fraudulent claims for refunds. If you suspect that someone has filed taxes in your name without your knowledge or consent, it is important to contact the IRS immediately and report the fraud.

What Are the Common Signs of Tax Fraud?

Depositphotos 253528128
Depositphotos 253528128

1. Receiving a notice from the IRS

Receiving a notice from the IRS can be a sign of tax fraud if the taxpayer has filed more than one return in their own name, or if their wages or benefits have been reduced or canceled due to information reported to the IRS.

2. Being asked to mail Form 14039 to the IRS

Form 14039 is an Identity Theft Affidavit that can be used to alert the Internal Revenue Service (IRS) of possible tax fraud. Mailing this form to the IRS can be a sign of potential tax fraud as it is used to report when someone has filed taxes in another person’s name without their knowledge or permission. The form must include copies of the victim’s driver’s license, passport, Social Security card, or other government-issued ID.

Additionally, people should be aware that scam calls or emails claiming individuals owe taxes are likely fraudulent and these occurrences should be reported immediately.

3. Receiving a refund recalculation scam

Refund recalculation scams are a type of fraud that involves criminals attempting to steal someone’s tax refund. The scam typically involves the thief pretending to be the taxpayer in order to get them to provide their personal information so that they can file a false tax return in the victim’s name and receive their refunds.

To avoid being scammed, one should always be cautious about who they give personal information and never respond to emails from unknown contacts claiming a refund recalculation is owed.

If someone believes that someone has filed taxes in their name, they should contact the IRS immediately, as this could indicate fraudulent activity.

4. Being assigned a special number to use on your tax return

Being assigned a special number to use on one’s tax return means that the individual has had identity theft in the past and is enrolled in the IRS IP PIN program. The IP PIN must be entered when filing taxes electronically, and there is no way to opt out of this program once enrolled. The IP PIN helps verify filers’ identities and prevents fraudulent returns from being processed.

5. Receiving a gift card scam

One common tax fraud tactic is the gift card scam. In this scam, a perpetrator will call an individual claiming to be from the IRS and request payment for taxes that are supposedly due or penalties to be paid. If someone receives such a call, they should hang up immediately, as it is likely a scammer trying to steal their identity or money.

People should also be aware of other scams related to the IRS like identity theft and government stimulus check scams during income tax season.

6. Being asked to pay taxes with a prepaid debit card

Being asked to pay taxes with a prepaid debit card is a common sign of tax fraud because it allows scammers to easily steal money from unsuspecting taxpayers. This method of payment also makes it difficult for the IRS to track the source of funds and identify the perpetrator, making it an attractive option for criminals looking to commit fraud.

7. Receiving a Taxpayer Advocate scam

Taxpayer Advocate scams are a type of tax fraud that involves individuals claiming to be from the IRS and requesting personal information, such as Social Security numbers or taxpayer identification numbers.

These scammers typically also attempt to deceive taxpayers by offering services that may not be beneficial. Common signs of this type of tax fraud include deceptive marketing practices and requests for unnecessary payments or gift cards.

It is important to be wary of anyone who claims they are from the IRS and asks for your personal information, as the IRS will never call you about taxes or penalties you must pay.

Depositphotos 9415227
Depositphotos 9415227

How to Report and Prevent Tax Fraud?

Step 1: File Form 14039 to alert the IRS to tax-related identity theft

It is important to file Form 14039 if someone suspects they have been a victim of tax-related identity theft in order to notify the IRS. Filing this form allows the actual return to be processed as quickly as possible, and may prevent any fraudulent activity from occurring. If a person mails in their return, they may receive a written notice from the IRS prompting them to verify their identity through either telephone or an online Identity Verification Service.

Step 2: Mail Form 14039 to the IRS with proof of ID

The IRS recommends filing Form 14039 with your social security card and driver’s license if you believe someone has filed taxes in your name. Additionally, copies of a driver’s license, passport, Social Security card, or any other government-issued ID card should be submitted when mailing or faxing the completed form to the IRS location you normally file taxes at.

Step 3: Be aware the IRS will flag your tax account

The IRS will flag an account if it suspects tax fraud has been committed. This flagging can be done through an e-file rejection due to a discrepancy in the Social Security number provided or other indicators that can point to fraudulent activity. Upon receiving a notification, the taxpayer should take immediate action to determine the cause of the issue and how to proceed.

Step 4: Know the Stimulus payment scam

The stimulus payment scam is a form of cybercrime in which criminals attempt to acquire victims’ personal and financial information to gain access to additional payments. The IRS will never contact individuals via email for this purpose, and any requests for money or personal details should be viewed with suspicion. To protect themselves, people should be aware of the signs of an IRS scam, such as emails asking for money or personal information, and take steps to protect their data.

Step 5: Identify the Taxpayer Advocate scam

It is important to be able to identify the Taxpayer Advocate scam because it is an attempt by scammers to extract money from taxpayers by posing as a government official. Being aware of this type of scam can help protect taxpayers from falling victim to it.

Knowing how to recognize the signs that someone may be attempting a scam, such as unexpected phone calls and requests for personal information, can help ensure that taxpayers are protected against fraud.

Taking proactive steps such as freezing credit or locking accounts when credit cards are lost or stolen, filing complaints with the IRS if Social Security numbers have been compromised, and responding quickly and appropriately to notices received from the IRS can also provide additional protection.

Step 6: Recognize the refund recalculation scam

The refund recalculation scam is a form of tax fraud wherein criminals contact individuals pretending to be from the IRS, claiming that their refund has been recalculated and they now owe more money than originally thought. The scammer typically asks for personal information such as Social Security numbers, birth dates, driver’s license numbers, and other identifying details.

To protect oneself against this scam, one should understand how the IRS works and what to do if they receive any emails from the IRS concerning a potential mistake in their refund.

The IRS will never ask for any personal or financial information through emails. If someone has become a victim of identity theft related to tax fraud, it is advised to file a complaint with FTC immediately as well as contact the IRS Identity Protection Specialized Unit. (See: How to File a Complaint with the Federal Trade Commission here.)

Step 7: Be aware of the gift card scam

The gift card scam is a tax-related identity theft in which criminals call people claiming they owe taxes and will be subject to criminal activity if they do not pay with a gift card. The IRS will never ask for payment in the form of a gift card, and the Federal Trade Commission recommends reporting any type of identity theft, including the gift card scam.

Consumers should also be aware that being verified as a victim of tax-related ID theft does not guarantee their refund will not be stolen.

To protect themselves from this kind of fraud, consumers should familiarize themselves with Consumer Alerts issued by the Attorney General on identity theft prevention and recovery.

Step 8: Monitor your accounts and activity

It is important to monitor one’s accounts and activity in order to prevent tax fraud. Doing so can help protect individuals from identity theft, data breaches, and other fraudulent activities.

By signing up for services that monitor online activity, individuals can add a valuable layer of protection against these risks.

Additionally, they may benefit from features such as credit file monitoring or identity theft expense reimbursement coverage provided by certain services like IDProtect.

Lastly, it is recommended to contact financial institutions in order to add a fraud alert or other precautionary measures to their banking profiles for added security.

Step 9: Use strong passwords

Strong passwords are important in relation to tax fraud because they help protect individuals’ personal information from being stolen or hacked. By using strong and unique passwords, individuals can help ensure that their data is secure and that unauthorized parties cannot access it.

By utilizing two-factor authentication and multi-factor authentication, users can add additional layers of security which make it harder for scammers to log into accounts even if they have a username and password.

Step 10: Be wary of suspicious emails

When it comes to tax fraud, one should be wary of suspicious emails that contain attachments that are unrecognizable or seem suspicious. It is important to log into any accounts associated with the email address in order to check if the information matches.

Step 11: Use a secure internet connection

When reporting tax fraud, it is important to use a secure internet connection in order to protect personal information such as Social Security numbers and bank account numbers from being stolen. Secure connections help ensure that data is encrypted, making it more difficult for malicious actors to access sensitive information.

Depositphotos 145293617
Depositphotos 145293617


What are the consequences of tax fraud?

Tax fraud can have serious consequences for the victims. They can experience financial losses, legal problems, and a damaged credit score. The IRS may also impose fines or penalties on those who are found guilty of filing fraudulent returns. Additionally, victims of identity theft may be subject to further investigations and must take steps to restore their credit score and protect their finances from future fraud attempts.

How can you prevent tax fraud?

To prevent tax fraud, individuals should take steps to protect their personal information. This includes using strong passwords to safeguard any online data and not carrying Social Security cards or numbers with them.

It is also important to file taxes as early as possible, which reduces the chances of someone else filing in their name.

Furthermore, it is essential to only work with reputable tax preparers who use high-grade security measures for sensitive information.

Individuals should be wary of requests for personal data over emails, texts or calls, and opt in for two-factor authentication on financial accounts. It is also advisable not to respond to unsolicited calls from the IRS and send sensitive data over secure channels when available.

Finally, people should confirm a tax preparer’s credentials with the IRS before they pay any fees.

What do you do if you think you are a victim of tax fraud?

They should take certain steps if they think they are a victim of tax fraud. They should sign up for a newsletter from the IRS, check their credit report, contact their bank to see if they were scammed, and dispute any incorrect information on their return with the IRS.

  • It is important to file a complaint with the FTC and take precautionary measures to protect themselves from identity theft.
  • It is also recommended that victims of tax fraud file their taxes as soon as possible in order to avoid any penalties or future problems.
  • The IRS also has an Identity Protection Specialized Unit, which victims can contact for guidance and assistance throughout the process.
  • It is important for victims of tax fraud to respond to any IRS notices sent out and fill out an identity theft affidavit in order for them to receive help from the proper channels.
  • Finally, it is important for victims of tax fraud to be aware that even if false refunds are claimed in their name; nothing will actually be stolen as long as they stay proactive throughout this process; however delays could still occur when claiming refunds due back legally entitled amounts owed by taxpayers through legal channels like filing taxes or other forms of claimable income/assets returns.

What do you do if you receive a notice from the IRS about tax fraud?

  • If someone receives a notice from the IRS about potential tax fraud, they should respond immediately.
  • If the notice is received online while filing their taxes, they should follow the instructions on the IRS’s website.
  • If more than one tax return was filed in their name, as indicated by an IRS letter, this is a serious red flag and could indicate fraudulent activity.
  • If they receive a letter from the IRS stating that their return is under review or that more wages were reported than what was actually earned, this could be indicative of tax fraud and should be taken seriously.

How can you report tax fraud?

Individuals who suspect they may be the victims of tax fraud should take certain steps to report it.

They should file Form 14039 to request a copy of the fraudulent return and check their credit reports. If you e-file your tax return and it is rejected, a paper return must be submitted by the filing deadline. Also, individuals can complete and mail Form 14039 to Identity Theft Victim Assistance.

It is also important for those who suspect tax fraud to file a police report, as well as a report with both the Federal Trade Commission and their local law enforcement agency. Furthermore, individuals should check their credit reports and account statements for signs of fraud, put a credit freeze on their accounts, call the credit bureaus in order to freeze their credit, get PINs for filing taxes in order to add an extra layer of protection against identity theft when filing taxes online from any unknown device or computer system,and always remember that once you are in (the process) – don’t skip out on filing! Taking these preventive measures will help protect individuals from potential identity theft related issues while filing taxes correctly each year.

What information do you need to file taxes?

Individuals, businesses, and self-employed individuals need to file taxes. To do so, they must provide their email address and the last four digits of their Social Security number. This information can be found on the ‘Name and Address’ screen or on a PDF copy of the return. People can also contact support if they need help filing taxes.

For added security, it is recommended to verify any personal information in accounts with the respective email provider. The IRS website provides additional resources for those looking for more information on filing taxes as well as online tools and services that can help with tax filing processes.

When is the tax deadline?

The tax deadline is April 18th, so taxpayers must file their taxes before then in order to avoid tax fraud. Fraudsters have a two-month window to file fake tax returns, so it’s important for taxpayers to submit their returns as soon as they receive W-2 forms or before the end of March, whichever comes last.

Tax-related ID theft can happen regardless of income or refund status, and scammers often try to stay under IRS radar by making claims for less than $4,000. By filing taxes on time and taking preventive measures like avoiding public Wi-Fi networks when submitting financial information online, taxpayers can safeguard themselves from becoming victims of tax fraud.

What is the best way to file taxes?

Filing taxes is an essential part of managing one’s finances, and should be done as soon as possible. If the IRS rejects a return that has been submitted, it could be because someone else has already filed in the person’s name. To avoid further complications and restore identity if they have been a victim of fraud, individuals should fill out and send Form 14039 right away. An alert notification will then be issued regarding the fraudulent return.

Final Thoughts

If you think you might be a victim of tax fraud, don’t panic. There are steps you can take to protect yourself and to resolve the issue. The most important thing is to take action quickly, and to stay vigilant in the future.

Disclaimer: Dora’s Corner and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. (For more info, please see our Terms of Service page.)

Happy Trails,

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