By now, we are all familiar with the term, identity theft – the fraudulent use of a person’s private information for financial gain. A crime where a fraudster obtains your personal information such as social security and driver’s license numbers and uses them for their personal financial gain. It can start with a lost/stolen wallet, stolen mail, a data breach, computer virus, or “phishing” scam. And ends with victims spending a lot of time and possibly money trying to prove their innocence.
While there is no surefire way to avoid identity theft, you do want to be alert for evidence of Identify theft. Catching it early will help stop it early.
Watch for These Identity Theft Indications
- More that one tax return was filed in your name.
- Your E-file was rejected because the IRS says you already filed one when you did not.
- You have a balance due, refund or collection action in a year you did not file or fully pay.
- You were the victim of employment related identity theft.
- A company you never heard of reported wages to the IRS.
- A company you did not work for sent you a W-2 or 1099.
- Your notice from Social Security shows more income than you earned.
- Your Social Security benefits were adjusted or denied because of wages that you did not earn.
Take Affirmative Actions If You Believe You’re the Victim of Identity Theft
- Have your CPA respond to the “person to contact” on an IRS notice.
- If you do not have an IRS notice but suspect Identity Theft, call the IRS at 800-908-4490.
- Fill out form 14039 Identity Theft Affidavit or have your CPA help you. This alerts the IRS to suspected theft on your account. If the IRS knows that thieves used your tax return, they will issue you a PIN number to be used on future returns as additional security against future thievery.
- File a complaint with the Internet Crime Complaint Center (IC3).
- File a report with your local police.
- If you have specific information about a business that used your personal data in some unauthorized manner, file a complaint with the Federal Trade Commission (FTC) .
- Place a fraud alert on your credit reports by contacting any one or all of the three credit reporting companies:
- If you receive a form W-2 from an unknown employer or wages reported to Social Security you know are wrong, call them at 877-438-4338.
- Contact your banks and other financial institutions including credit companies, and close any and all accounts that might be compromised by thieves. You might just want to go ahead and renumber all accounts, even if they have yet to be compromised.
Avoid Future Problems with Identity Theft
- Question the legal requirement to provide your SSN to non-tax agencies. Ask to use alternative means.
- Never let your credit card out of sight.
- On the back of your credit/debit card, instead of signing it, put “ask for identification”.
- Your employer, bank or financial institutions are the only ones that really need your SSN. Question all others.
- Review your credit report annually. You can order one free annual credit report per year at: annualcreditreport.com or by calling (877) 322-8228.
- Stay informed. There is a wealth of information out there on protecting yourself from identity theft.