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Be Prepared for Taxpayer ID Theft
by Knowing the Warning Signs

By Mark Pribish, VP & ID Theft Practice Leader,
Merchant’s Information Solutions, Inc.

Unfortunately, taxpayer identity theft and refund fraud happens when identity criminals steal the Personally Identifiable Information (PII) of taxpayers and file fraudulent refunds in their names.  When the real taxpayers file, their refunds aren’t paid until the IRS resolves their individual case.

Two common examples of Taxpayer Identity Theft include:

Refund Fraud – occurs when an identity thief uses an innocent taxpayer’s name and Social Security Number (SSN) to file for a tax refund.  Not until the actual taxpayer files a return does it become apparent that both identity theft and fraud have been committed.

Employment Fraud – occurs when an identity thief uses an innocent taxpayer’s name and SSN to obtain employment. When the thief’s employer reports income to the IRS, the taxpayer appears to have unreported income on his or her return, leading to enforcement action.

The IRS has prepared a Taxpayer Guide to Identity Theft to help fight against tax-related identity theft.

This taxpayer guide will help you understand what is taxpayer identify theft and the warning signs.  It will also help you with steps to take if you become a victim including filing a complaint with the FTC at:

Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:

Equinox  1-800-766-0008
Experian 1-888-397-3742
TransUnion 1-800-680-7289

Contact your financial institutions, and close any financial or credit accounts opened without your permission or tampered with by identity thieves.

According to the IRS, you can reduce your risk of taxpayer identity theft by following these basic suggestions:

Always use security software with firewall and anti-virus protections. Use strong passwords.

Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card companies and even the IRS.

Do not click on links or download attachments from unknown or suspicious emails.

Protect your personal data. Don’t routinely carry your Social Security card, and make sure your tax records are secure.

Finally according to the General Accountability Office (GAO), the “IRS estimates that in 2014, it prevented or recovered $22.5 billion in attempted IDT refund fraud, but paid $3.1 billion in fraudulent IDT refunds. Because of the difficulties in knowing the amount of undetected fraud, the actual amount could differ from these point estimates.”

If you believe you are a victim of Taxpayer Identity Theft, you can contact the IRS at 1-800-908-4490 and complete the IRS Identity Theft Affidavit, Form 14039.

If you receive a suspicious email or believe you have received an online phishing scam you can call 1-800-366-4484 or report it to the IRS at:

It is also very important to remember that the IRS does not initiate contact with taxpayers by email to request personal or financial information!

To learn more about these threats and how to protect yourself and your business from identity theft, check out the CTiQ SmartID for Business Identity Theft Protection and Resolution Services.