Whether investing in a business, filing a tax return or using a credit card, financial crimes have become an area of major concern for everyone. It’s because scammers keep a close watch on your finances. So, you must monitor your economic activities minutely and carefully and do the needful in order to recover your finances.
Actions to take in case of a tax scam
Tax-related identity theft can happen to anyone, anywhere. That’s why, you should have an idea of what to do if someone files a false tax return in your name.
To make your job easier, I have listed a few things that you should keep in mind if your tax refund gets stolen.
1. File a 14039 form
So, you should fill out this form and mail it to the IRS if it notifies you about the fraud or you suspect to be the victim of tax fraud. In addition to this form, you have to provide your Social Security card, driver’s license or passport.
2. Set up a security freeze on the accounts
A security freeze is also known as the credit freeze. Call the 3 credit bureaus (Experian, TransUnion, and Equifax) and tell them to freeze your credit accounts so that no one can issue new credit in your name. Remember that you’ve to unfreeze your credit accounts when you apply for a new utility or cell phone service.
- Equifax - 800-525-6285
- Experian - 888-397-3742
- TransUnion - 800-680-7289
3. Analyze credit card accounts
Check your credit card accounts to identify any inaccurate charges like an address change, other charges and so on, which you’ve not authorized.
4. File a police complaint
A must do in case of any fraud. Most local police departments have a different division for ID theft or financial crimes that deals with these matters. Share every detail of the scam with the police so that they have more information to track the criminals.
5. File a complaint with the FTC
The Federal Trade Commission (FTC) has options to protect consumers from any fraudulent activities. The FTC website has useful information for taxpayers who have become a victim of such fraudulent activities.
6. Beware of scams
Store these words in your brain forever - the IRS won’t ask for your financial information via email or phone. So, be very cautious if anyone seeks your personal information like your Social Security Number, credit card details or anything like that over the phone because they are scams.
If you haven’t received the notice of fraud from the IRS yet, but believe that you have been scammed, get in touch with the IRS Identity Protection Specialized Unit at 800-908-4490 immediately.
7. Get an IP PIN
Use the Identity Protection Personal Identification Number (IP PIN) to ensure a safe tax filing process.
As written on the IRS website - “You may choose to get an IP PIN if you received an IRS letter inviting you to 'opt-in' to get an IP PIN, or you filed your federal tax return last year with an address in Florida, Georgia or the District of Columbia.”
8. Work with an authorized tax preparer
Tax preparers can be perpetrators of fraud also. So, be careful while choosing someone to do your taxes.
Do some background check before handing over your financial details to someone else (here it is the tax preparer).
Are your finances in danger? If so, then take the required actions right away to save your finances from the hands of the scamsters.
