In recent years the volume of identity theft incidents has grown at an alarming rate. In 2014, more than 9.9 million Americans were victims. Although often less talked about, tax-related identity theft crimes have risen drastically in recent years too. In 2013 alone, more than 2.4 million taxpayers were affected according to the Treasury Inspector General for Tax Administration – a number which has continued to grow year-after-year with the anticipation upcoming years will be no different.

Efforts to combat the growing concerns have been underway in the last decade by the various governmental entities. For example, federal and state governments have enacted laws to levy separate and additional penalties for fraud committed using stolen identity information, which prior to the 20th century was never the case. Congress has passed and amended numerous federal laws to achieve this including the Fair and Accurate Credit Transaction Act, Fair Credit Reporting Act, Identity Theft Penalty Enhancement Act, and the Identity Theft Enforcement and Restitution Act.

The Internal Revenue Service (IRS) has also joined the efforts. Most recently in August 2015, the IRS, in collaboration with tax preparers, software companies and others, issued temporary regulations to help validate taxpayer and tax return information at the time of filing by eliminating automatic deadline extensions to companies filing their employees’ Form W-2s.

Tax Identity Theft

Most people are familiar with signs of non-tax related theft, but may not be as familiar when it comes to tax-related identity theft or how to remediate the situation if it occurs. Some of the most common indicators you may have become a victim of identity theft are:

  • You attempted to file an electronic return, but the IRS has rejected it because a return with your Social Security number has already been filed.
  • You receive an IRS notice indicating wages were received for a company you have never been employed with.
  • You get a letter from the IRS that a return or multiple returns have already been filed with your Social Security number and you have yet to file yours.
  • You receive a balance due notice, refund notice or collection actions for a year you filed, but weren’t owed or due any money.

If you realize you have fallen prey to tax identity thefts, you’re not alone. According to the Federal Trade Commission, 2014 marked the fifth consecutive year tax-related identity theft topped the list of complaints, with more than 100,000 received. In most instances, the identity thief used a Social Security number to file a false return early on in the tax season.

Identity theft can be a frustrating process for victims, especially if your hard-earned refund is being held hostage because of it. To learn how to reclaim your tax identity and refund read our recent article, Tax Identity Theft: Getting Your Refund Back

Here to Help

If you have become a victim of tax identity theft, you don’t have to go at the process alone. Contact Doeren Mayhew’s tax advisors in Troy, Michigan and Houston to help you reclaim your identity and any refunds due.