Identity Theft & Taxes: What Should You Do?

Finding out that someone may have used your identity—especially your Social Security number—to file a tax return can be overwhelming.

Tax-related identity theft generally happens when someone uses your stolen personal information to file a fraudulent tax return or commit another tax-related crime in your name.

So, what should you do if it happens to you?

1. Start at IdentityTheft.gov

If your personal information has been stolen or misused, visit IdentityTheft.gov to report the identity theft and create a recovery plan.

The steps you need to take can depend on exactly what information was compromised and how it was used.

2. Determine Whether You Need Form 14039

Form 14039, Identity Theft Affidavit, is used in certain situations involving tax-related identity theft.

However, don’t automatically file this form just because you think your information may have been exposed.

The IRS specifically advises taxpayers to use Form 14039 when appropriate, such as when instructed by the IRS or when their Social Security number has been used fraudulently for federal tax purposes.

If you receive an IRS notice about a suspicious return, follow the instructions in that notice.

3. Still File Your Tax Return

Identity theft doesn’t eliminate your responsibility to file your tax return.

If someone has already fraudulently filed using your Social Security number, your legitimate electronic return may be rejected as a duplicate.

If you can’t e-file because of identity theft, the IRS may instruct you to file your return on paper along with the appropriate documentation.

Don’t simply skip filing because there’s a problem.

4. Don’t Ignore IRS Letters

If the IRS notices suspicious activity associated with your tax account, you may receive a letter asking you to verify your identity or confirm whether you filed a particular return.

Read the letter carefully, follow the instructions and keep copies of any correspondence.

And remember: not every message claiming to be from the IRS is legitimate.

If you receive a suspicious text, email or social media message claiming to be the IRS, don’t automatically click the link or provide personal information.

5. Consider an IRS Identity Protection PIN

An Identity Protection PIN (IP PIN) is a six-digit number that helps prevent someone else from filing a federal tax return using your Social Security number or Individual Taxpayer Identification Number.

You don’t have to wait until you’ve already been a victim of tax-related identity theft to request one.

Eligible taxpayers can voluntarily opt into the IRS IP PIN program as an additional layer of protection.

And remember—your IP PIN should be kept private and only shared when necessary for filing your tax return.

6. Protect Your Information Going Forward

Once your information has been compromised, being proactive becomes even more important.

Use strong and unique passwords, enable multi-factor authentication when available, securely store tax documents and be cautious about unexpected messages requesting personal or financial information.

Tax documents contain some of your most sensitive information—your Social Security number, income information, address and financial details—so treat them accordingly.

The BasicLee Bottom Line

If you experience identity theft, don’t wait until tax season to deal with it.

Report the identity theft, pay attention to IRS correspondence, continue meeting your tax filing obligations and take steps to protect your tax account going forward.

And if you’re unsure how identity theft has affected your tax return, reach out to a qualified tax professional for help navigating your specific situation.

BasicLee Bookkeeping believes understanding your taxes is just as important as filing them. Follow along for more straightforward tax tips, updates and answers to the questions taxpayers actually ask.

This information is for general educational purposes and is not individualized tax or legal advice.