Identity Theft and Tax Fraud

April 8, 2008

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We know that tax time can be a time to be on heightened alert for identity theft. Not only can the tax season attract scammers pretending to be the IRS, but tax fraud itself can be an alarming form of identity theft.

If I Work Two Jobs, I Want Two Paychecks

The most common form of tax fraud is when “undocumented workers” use your Social Security Number to get a job. The employer then reports those earnings to the IRS.

This can cause two problems:

1. The identity thief could file a tax return to get a refund. When you file yours, the IRS will say that you’ve already filed a return
2. Even if they don’t file a return, when you file yours it is going to look like you didn’t report all your earnings because you didn’t report those from the “other” job

What To Do About It

You will probably only find out that this has been going on when you receive a notice of some sort from the IRS. If you do, contact the IRS right away using the contact information on the notice and explain the situation.

If you still can’t get a resolution, the IRS has a “Taxpayer Advocate Service” (who knew?). Go to http://www.irs.gov/advocate/ or call toll-free: 1-877-777-4778.

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