What Tax Fraud Victims Can Do

File your taxes as early as possible. If you file your state taxes this year and discover that your state return has already been filed, you should report the matter to your state revenue agency. For a list of state agencies, their hotlines and Web sites, see the second half of this page.

Intuit is encouraging all previous and current TurboTax customers to log into their accounts to see if there has been a return fraudulently filed. The company also is encouraging users to verify their bank account information and be sure that hasn’t been changed, as well as any other contact information associated with the account. Customers who detect errant changes can call TurboTax customer service at 800-944-8596. The company says it’s also offering free credit monitoring service for customers that have had account compromises.

If you become the victim of identity theft outside of the tax system or believe you may be at risk due to a lost/stolen purse or wallet, questionable credit card activity or credit report, etc., you are encouraged to contact the IRS at the Identity Protection Specialized Unit, toll-free at 1-800-908-4490 so that the IRS can take steps to further secure your account.

That process is likely to involve the use of taxpayer-specific PINs for people that have had issues with identity theft. If approved, the PIN is required on any tax return filed for that consumer before a return can be accepted. To start the process of applying for a tax return PIN from the IRS, check out the steps at this link. You will almost certainly need to file an IRS form 14039 (PDF), and provide scanned or photocopied records, such a drivers license or passport. Understand, however, that the IRS does not approve all PIN requests, and the approval process seems to be quite delayed and haphazard at best.

Also, consider placing a fraud alert or freeze on your file at the major credit bureaus. If crooks have enough of your personal information to file a fraudulent tax return in your name, those same lowlifes can use that data to commit other crimes. Placing a fraud alert on your credit file every 90 days is the cheapest (as in free) way to block creditors from granting new lines of credit in your name, and from unnecessarily dinging your credit score.

You are entitled to a free copy of your credit report from each of the three major credit bureaus annually. The only site you need to obtain this free copy is annualcreditreport.com, or by phone via 877-322-8228. Everywhere else will try to sell you a report, or offer a “free” report if you agree to sign up for some kind of subscription service — usually credit monitoring.

If you have been the victim of identity theft, or if you don’t anticipate needing to take out a loan or apply for new lines of credit anytime soon and you’d rather not deal with fraud alerts, placing a freeze on your credit file may be the smarter option.

A security freeze gives consumers the choice to “freeze” or lock access to their credit file against anyone trying to open up a new account or to get new credit in their name. As Consumers Union writes, “when a security freeze is in place at all three major credit bureaus, an identity thief cannot open a new account because the potential creditor or seller of services will not be able to check the credit file. When the consumer is applying for credit, he or she can lift the freeze temporarily using a PIN so legitimate applications for credit or services can be processed.”

Forty-nine states and the District of Columbia now have laws on the books allowing consumers to freeze their credit (Michigan is the holdout). Many of these laws allow the placement of a freeze for free if the consumer has a police report documenting an identity theft episode; for those without an ID theft scare notched on their belt, most states allow for the placement of a freeze for a $10 fee. See this site for more details on the various state freeze laws and instructions on how to obtain them.

Consumers also can reduce their exposure to identity theft by opting out of unsolicited credit card or insurance offers. Doing this, via www.optoutprescreen.com, or 888-5OPT-OUT, should block most unsolicited applications and reduce the incidence of identity theft. Doing so removes your name, address and personal identifiers from lists supplied by the Equifax,Experian, TransUnion and Innovis credit reporting agencies that are used for preapproved and pre-screened offers of credit or insurance.

Many consumers turn to credit monitoring services to protect them and their loved ones from identity thieves. Before you shell out good money for such a service, check out the primer I wrote about the uses and limitations of credit monitoring services.

Also, check to see if an organization that stores your information has potentially jeopardized in a recent data breach. Chances are they are already offering credit monitoring to you for free. For example, some 80 million+ Americans are likely to get this offer from Anthem, the health insurance giant that recently announced that it would be notifying affected members by snail mail about credit monitoring offers. Some 56 million Home Depot shoppers also are eligible thanks to their data breach in Sept. 2014.

Virtually any company listed in the past year in my Data Breaches category is offering it, but my site is hardly an exhaustive list. California’s Office of the Attorney General has a searchable list of companies that have recently reported data breaches, and nearly all of those firms are offering free monitoring services for affected consumers.