Tax identity theft continues to be a significant problem for taxpayers. Tax identity theft occurs when criminals use the personal information of individuals and file fraudulent tax returns before the taxpayer does, requesting a refund. When the real taxpayer files his or her tax return, the IRS kicks it back, explaining that it has already been filed. It has happened to me, and it is a nightmare.
Although tax identity theft cases have declined over the years, due in part to IRS process changes and enhanced security, it remains a huge issue, and now is the time of year that it happens. Taxpayers should be on high alert. It continues to be such a problem that the Federal Trade Commission (FTC) designates this week tax as Identity Theft Awareness Week each year. That is so sad.
Nonetheless, the FTC does a good job of getting the word out, providing information to tax payers about the issue, and offering resources for individuals on their risk, how the fraud happens, and how you can protect yourself and recover if it happens to you.
To access these free resources, go to www.ftc.gov/taxidtheft.