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Tax-Related Identity Theft and Refund Fraud

Tax-related identity theft and fraud are growing problems that state and federal revenue collectors are addressing this tax season through increased vigilance and safeguards.

Tax-related identity theft occurs when someone uses your stolen Social Security number to file a tax return claiming a fraudulent refund. An identity thief will use your Social Security number to file a false tax return early in the year, and collect a refund.

You may be unaware you are a victim until you try to file your taxes and learn that a return has already been filed using your Social Security number. You may receive a notice that you owe additional tax, have a refund offset or have had collection actions taken against you for a year you did not file a tax return. You may also learn that IRS records indicate that you received wages from an employer unknown to you.

To help combat fraudulent tax returns, refunds and prevent tax-related identity theft, the IRS and Iowa Department of Revenue are asking taxpayers to be aware of the problem and take precautions to help prevent and identify it.

Changes for Online Filers
The IRS and state revenue agencies, including the Iowa Department of Revenue, are making changes to enhance security. You may notice some of these changes if you file your taxes online. The changes include new security requirements when you sign in to your account. In some cases, taxpayers may receive a refund check through the mail and not through a direct deposit as requested, to assure that refunds go only to the intended taxpayer and not a criminal.

Other Changes
Tax return preparation firms, tax preparation software providers, and other tax industry participants are enhancing certain security requirements and strengthen validation procedures. The changes include new password standards, security questions and other verification procedures.

Federal and state revenue agencies are enhancing their electronic monitoring of tax return submissions that will assist in preventing identity theft returns. For example, government computer systems will seek to detect improper or repetitive electronic addresses from where tax returns were transmitted.

Always protect your personal information
Do not routinely carry your Social Security card or documents that list the number for your or your dependent family members. Don’t give a business your Social Security number just because they ask—only provide it when absolutely necessary. Shred sensitive documents before throwing them away.

Reporting Tax-Related Identity Theft
If you suspect you have been victimized by tax-related identity theft, report it:

  • IRS Identity Protection Specialized Unit: 800-908-4490 or www.irs.gov
  • Iowa Department of Revenue: https://tax.iowa.gov, or call 515-281-5986
  • Call one of the three major credit reporting agencies to put a fraud alert on your credit report:
    • TransUnion 800-680-7289; Equifax 800-525-6285; Experian 888-397-3742
  • File a complaint with the Federal Trade Commission (FTC) at www.IdentityTheft.gov or call 877-438-4338
  • File a report with your local police department or sheriff's office
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