How Identity Theft Can Affect Your Tax Return

Top 3 Tax Scams

Identity theft is a terrible thing. It can wreck havoc on your credit rating and make you feel violated. Knowing that your personal information is out there, circulating in the world and being used against you… It’s a horrible prospect. And one of the worst things about it is that it could have a profoundly damaging effect on your tax returns.

At Hacker Accounting, we know how serious identity theft can be. Here’s why you should take it seriously too: Here’s how it can affect your tax return.

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Multiple Tax Returns

One of the biggest warning signs of identity theft is if the IRS contacts you because you’ve filed more than one tax return for one tax year.  Identity thieves will often steal social security numbers and use them to get jobs. The IRS will red flag this, because they’ll notice that “you” received wages from an employer they don’t know.

This can be problematic for you on several levels. First off, it means that they filed before you did, which means they got “your” refund. If the IRS owes you money on your return, getting it from is going to be a long process as you untangle your return from the one already on file. It can also look like you’re withholding earnings: Since your return is missing the earnings reported on the false one, it can look like you’re omitting them. This is what often triggers a notice or letter from the IRS saying you got wages but did not report them.

What To Do If You’ve Had Your Identity Stolen

Step one is simple: Contact the IRS IMMEDIATELY. Do not delay. Also report the fraud to the authorities. You’ll want to send a copy of your police report or an IRS ID Theft Affidavit Form 14039 to the IRS. You’ll also want to send proof of your identity, which can be done by making and sending copies of any of the following:

  • Social Security card
  • Driver’s license
  • Passport

Record the dates of all communications you have with the IRS, including both sent letters, letters received and phone calls. Keep copies of ALL your letters on file: You may need them later. Order copies of your credit reports and put a fraud alert on them. Check your bank account and any of your funds to make sure that the identity thieves didn’t tap into those resources as well.

Related: How Your Tax Return Can Help Save You Money

For more information on how identity theft could affect you, give Hacker Accounting a call at 602-375-5251.

Chris Hacker
Chris has been working in the bookkeeping and accounting field for over 15 years preparing business, income and payroll taxes. Chris has a bachelor’s degree from Arizona State and is an Enrolled Agent with the Internal Revenue Service.