How to Avoid Tax Identity Theft

Written By Jeff Hindenach
Last updated February 2, 2021

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Personal Finance
March 10, 2015

Simple. Thrifty. Living.

Identity theft is a big problem during tax season. Thieves access personal information through a variety of means, and you must be on guard against such schemes. According to the IRS Taxpayer Advocate Service, the number of tax identity theft cases continues to rise at an exponential rate each year. Worse yet, the variety of scams perpetrators pull on unsuspecting taxpayers is only limited by the imaginations of these unscrupulous scammers.

Of course, the biggest danger with tax identity theft is that you may not always be aware you’ve been violated until a note comes from the IRS or your accountant tells you your sensitive information has been used to steal a refund, empty your bank account or apply for employment under your name.

Be careful about those offers promising that your refund check will be deposited into your bank account quickly. You could be paying a nominal fee just so scammers can line their pockets with your refund. These scammers ask for your personal information and your bank routing number. When they get your money, you’re left without your refund and most likely without recourse.

Phishing schemes are common when it comes to tax identity theft. These scams usually involve a call from an IRS employee promising a hefty refund. All that is needed is your checking account number. You are told that this information is needed to deposit money into your account. Unfortunately, scammers pilfer funds instead. There are many variations of this theme, but the gist of the con is to get access to your bank account.

Con artists using this scheme contact victims claiming they are government reps authorized to initiate payment transfers of tax rebates. You are urged to provide checking account or credit account numbers in order to get the money. Of course, no money is deposited, and your bank accounts are cleaned out entirely.

Don’t fall prey to these devious scammers. It’s important to remember that the IRS never reaches out to taxpayers via email. The IRS also does not typically request account numbers and credit card numbers over the phone to deposit money into an account. If you are contacted by a representative, and you want to confirm the caller’s identity, call the IRS customer service at 1-800-829-1040. If you want to protect yourself against identity theft, you might try an identity theft protection service.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of financial journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing on personal finance for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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