Your 2015 Taxes and Identity Theft

Silhouette of person and fingerprint on white background
Fraudulent returns filed under your name can rob you of your tax refund.. George Diebold/The Image Bank/Getty Images

Another tax season is upon us, and the onslaught of tax-related identity theft is expected to be even more widespread this year than previous years. Many consumers find out they are caught in an identity theft situation around this time of year, when they receive IRS Form 5071C in the mail, which is the IRS’ Request for Additional Information. Of course there are other reasons you may receive one of these, not just because you are an identity theft victim.

The biggest point to be aware of is that a credit monitoring service will not pick up on an identity thief filing taxes under your name and social security number. Technically, that is social security identity theft, and very few identity theft protection services address those issues.

Be aware that tax preparation services are a big point of risk for fraudulent returns. Every year that I’ve written about this, I’ve pointed to a handful of examples where a tax preparer snuck off with the information on previous clients and filed a tax return in their name, collecting the tax refund. Many of these are caught, far more are not. (This year, I’ll just point you to the IRS’ own website to look at the highlights of various tax-time identity theft investigations for this year.)

One scam that has seen a lot of play is for the tax preparation service to open a joint account with the filer, in order to use the return to pay for their services.

(Or they may want to use IRS Form 8888.) Both of these options are, obviously, illegal.

If you have a concern about the service doing your taxes, ask the preparer for his or her Preparer Tax Identification Number (PTIN) issued by the IRS. This will let you verify they are

Something new the IRS is doing to work against the tax fraud trend is instituting limits on direct deposits.

Starting this year no more than 3 tax refunds can be direct deposited into any given bank account. For most families this won’t have much of an impact, but if your household has 4 adults using the same bank account to get their refund, (if you have a spouse and two adult children using the account, for example,) expect the 4th refund to be converted to a paper check and sent to your mailing address. In this way, the Internal Revenue Service hopes to make it harder for identity thieves to collect fraudulent tax returns en masse as has happened in previous years.

The IRS offers the following tips as ways to protect you from becoming a victim of identity theft (taken directly from the IRS website):


  • Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Review your Social Security Administration earnings statement annually.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.


There is even an IRS website for you to track your refund if you are concerned about it.

If you believe you have had a fraudulent return filed for your taxes, use IRS Form 14039 to report it to the IRS immediately.

Continue Reading...