Law & Compliance

Identifying The Tax Identity Theft

Matters about the security of personal information and data are continually raising concerns. What’s more, when tax return filing deadlines keep drawing near, the more you should be alert. Unfortunately, the cases of tax identity theft keep growing with scammers devising new ways and tactics. However, what is tax identity theft and how can you identify them? Please read on to find out.

What is Tax Identity Theft?

Before diving into protecting yourself against tax identity theft, it is important to first find out what it means. This is a situation where someone steals your personal information and uses it to file a tax return. Therefore, it is the process through which a different person steals your information and uses the information to commit tax fraud.

The thieves can steal your name as the taxpayer. On some occasions, they even steal the taxpayer’s identification number. With the name and identification number, these thieves can do different things in your account, putting you and the account at great risk.

Read: Where to Get Free Money: Small-Business Grants

How to Identify Tax Identity Theft

Tax identity theft appears in different forms. The thieves use a variety of tricks and tactics so you need to be careful. You can stay alert in case of any fishy activities. Which ones are they? The following are some of the signs that you are probably a victim of tax identity theft;

1. Receiving a Notification That You Need to File a Return to Get Your Refund

This is a case of stolen refund and must be the most common type of tax identity theft that many fall victim to. When do you come across it? In most cases, you will realize it once the IRS rejects your efforts of trying to file your returns. Why is this so? It is because there is another person who already has filed returns using your information.

At this point, the next thing in your mind may be to file a paper return. Sadly, the IRS will send you a notice with the same information. At this point, you realize that you have become a victim of the theft.

2. An Online Account Open in Your Name Without Your Knowledge

When IRS gives you a notice of an account opened under your name but you have no clue about that specific account, it may be a sign of tax identity theft. It means that the thief has stolen your name and used it to open another account.

3. Getting a Notice About an Access to Your Online Account, and You Have No Idea

These are other notices that can raise your eyebrows. When IRS informs you that someone has either accessed or disabled your online account, you should be very concerned, especially if you did not perform any action on the account. If you did not tamper with anything in your account, it means someone else did.

4. You Get a Notice That an Account Was Created in Your Name

IRS may notify you of an account opened under your name. The sad part is that you don’t even know how who or when the account was opened. One clear thing, though is that someone stole your identity. Getting to a point of creating an account under your name means he has access to your personal information.

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5. IRS Informing You of Wages from an Employer You have No idea About

In some cases, IRS may record that you got wages or other forms of income from an unknown employer. In this context, the employer is unknown such that you didn’t work for any employer so they can give you money.

6. You Get an Employer Identification Number but You Didn’t Ask For one

This may be shocking, especially when you remember you didn’t request an Employer Identification Number. So, this shows that someone else must have done this, and chances are it is someone who stole your identity.

7. Receiving a Tax Transcript Even Though You Didn’t Ask for One

Whenever you get tax transcripts that you did not request, your antennas should be high since this is an indicator that someone is using your personal information to cheat.

8. Inability to e-file Your Tax

One of the reasons why this can happen is linked to the presence of a duplicate Social Security Number. Any suspicion of another similar social security number is one indicator that maybe you are a victim of tax identity theft.

On other occasions, you may go ahead with the e-file but find that another Social Security Number has already filed the tax return.

9. An Enquiry from IRS Requesting About a Suspicious Tax Return

IRS may notice some suspicions in your account and let you be aware. This is especially the case if you did not participate in filing the tax. However, since the tax return was already made, it means that someone used your information.

Read: Frozen Account; What to Do After your Business Account is Frozen?

What to Do When You Fall Victim to Tax Identity Theft

As noted earlier, such scammers keep devising more complex tactics so they catch those who are unaware. So, what if you fall victim? What should you do? In case you have suspicions that you are a victim of tax identity theft, rule number one is to never evade paying your taxes. You should always adhere to compliance requirements for your business taxes. On the contrary, go ahead with the tax payment and file the returns as need be in some cases, you may need to file a paper return. In any case, ensure you file the tax returns. Remember, at times, even after filing the paper return, you may still receive a notice from IRS.

Importantly, you should protect your data and identity at all costs so you don’t fall victim to these thieves of personal information.


With a lot of personal information available, taxpayers are at risk of having their personal information stolen. However, the good news is that the tax industry and IRS coordinate to ensure the taxpayer is protected. That is why IRS will always keep sending you a notice in case of any suspicious activities taking place in your account. Also, it will alert you to any questionable actions, that you probably aren’t the one who initiated. As mentioned in this article, there are different ways through which you can identify tax identity theft.

Other articles you might be interested in:

Understanding Small Business Taxes

How To Ensure Compliance in The Workplace

How to Do Bookkeeping: Basics Every Small Business Owner Needs to Know

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