Immediate checklist: What to do first

  • Call the IRS Identity Protection line at 1-800-908-4490 to report tax-related identity theft and get instructions for next steps (IRS Identity Theft resources: https://www.irs.gov/identity-theft-fraud-scams/identity-theft-information-for-taxpayers).
  • File IRS Form 14039 (Identity Theft Affidavit) if the IRS instructs you to do so or if you receive a notice that a return was filed using your SSN.
  • Report the theft to the FTC at IdentityTheft.gov and create a recovery plan. The FTC’s site centralizes forms and sample letters for credit bureaus, creditors, and debt collectors (https://www.identitytheft.gov/).
  • Place a fraud alert or credit freeze with the three major credit bureaus (Equifax, Experian, TransUnion) and get free credit reports via AnnualCreditReport.com.
  • Notify your state tax agency if a state return may have been affected.

How the IRS handles tax-related identity theft (briefly)

When the IRS suspects identity theft, it may delay processing the fraudulent return and flag the affected Social Security number. If the IRS sends you a notice, follow the instructions carefully—common letters include identity-theft-specific notices asking you to confirm you didn’t file the return. Confirmed victims are routed to IRS Identity Protection units for manual review. Expect verification steps and document requests; resolution can take weeks or months depending on backlog and complexity. See IRS guidance for taxpayers on identity theft for authoritative details (IRS Identity Theft Information for Taxpayers).

Step-by-step guide to restore your refund

  1. Confirm the problem and preserve documentation
  • Save any IRS notices (CPs or other letters). If you received an email or a text claiming to be from the IRS, do not click links; the IRS does not initiate contact via email or text to request personal information.
  • Record dates and names for every phone call; keep copies of mailed forms and certified-mail receipts.
  1. Call the IRS Identity Protection Specialized Unit
  • Phone: 1-800-908-4490. The IRS will explain the specific documentation it needs and may issue a case number. Be prepared to verify your identity with government-issued ID and supporting records such as a birth certificate, passport, or driver’s license.
  • If the IRS says to complete Form 14039, do so and follow submission instructions.
  1. Complete and submit Form 14039 (Identity Theft Affidavit)
  • Form 14039 notifies the IRS you are a victim and starts their identity-theft handling process. Include copies (not originals) of requested supporting documents per IRS directions. Maintain a copy for your records.
  • Link to Form 14039 and instructions: https://www.irs.gov/forms-pubs/about-form-14039 (see IRS Identity Theft forms page).
  1. Request copies or transcripts of the fraudulent return
  • You can request a tax return transcript or a copy of the filed return to review what was submitted in your name. Use Form 4506-T to request transcripts and Form 4506 to request a full copy of a filed return (fees may apply for full copies). The IRS may withhold some online transcript services for victims until identity verification is complete.
  • Keep copies of any fraudulent return elements as evidence for creditors, the police report, and the FTC report.
  1. Report to local law enforcement and your state agencies
  • File a police report using your local law enforcement’s procedures; request a copy of the report. Some creditors and agencies will accept a police report as part of an identity-theft claim.
  • Notify your state tax agency; state procedures vary and many states follow the IRS lead but may have separate recovery steps.
  1. Protect your credit and finances
  • Place a fraud alert (90-day) or extended fraud alert (7 years) with the credit bureaus and/or place a credit freeze. A credit freeze blocks new accounts from being opened in your name.
  • Dispute unauthorized accounts or charges. Consider enrolling in credit-monitoring services if you need hands-on supervision.
  1. Obtain or opt into an IRS Identity Protection PIN (IP PIN)
  • If you are confirmed as a victim, the IRS may issue an IP PIN or instruct you how to obtain one. An IP PIN is a six-digit number that must be entered with your return to confirm your identity and prevents someone else from filing a return using your SSN.
  • The IRS now offers an opt-in IP PIN program for eligible taxpayers who can pass identity verification (https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin).
  1. Work with a tax professional when necessary
  • Complex cases, theft that affects multiple years, or situations where the IRS requests extensive documentation are good reasons to engage a CPA or tax attorney who specializes in identity-theft recovery. In my practice I’ve found that a tax professional can help reduce errors in your submissions to the IRS and speed communications with the agency.

What to expect about timing and refunds

  • Timing varies. In many cases the IRS will delay issuing a refund while it investigates; many victims see a delay of 60–120 days, although complicated cases or high-volume seasons can extend that timeline (IRS guidance notes investigations may take longer depending on case complexity).
  • If the IRS determines you are the legitimate filer, you will receive your refund once the case is cleared. Keep your case number and follow up if you do not receive periodic status updates.

Preventing repeat incidents (practical controls)

  • File early. Filing your tax return as soon as you have the documents makes it harder for a thief to submit a fraudulent return first.
  • Use strong, unique passwords and two-factor authentication on tax-related accounts (IRS Online Account, email, tax software) and on financial accounts.
  • Shred old tax documents and store current tax records in a secure place.
  • Opt into the IRS IP PIN program if you are eligible or have been a victim.
  • Limit sharing your SSN. Provide it only when legally required and verify the identity and security of any recipient.

Common mistakes and misconceptions

  • Waiting to act. Delaying reporting identity theft to the IRS or FTC makes recovery harder and can lengthen refund delays.
  • Relying solely on a paid identity-theft service without filing Form 14039 or contacting the IRS. Private services may help with monitoring but do not substitute for official IRS reporting.
  • Assuming the IRS will automatically restore your refund quickly. Even after you report it, document-heavy verification is often required.

When to escalate or get help

  • If you receive repeated IRS notices or the IRS stops communicating for an extended period, escalate by sending requested documents via certified mail and following up with the IRS Identity Protection unit.
  • If your state refund is affected or you face identity theft tied to unemployment or other government benefits, contact the relevant state agency and the Department of Labor where applicable.
  • Consider contacting the Taxpayer Advocate Service if you experience financial hardship because of IRS delays. The Taxpayer Advocate Service (TAS) is an independent IRS organization that helps taxpayers resolve problems (https://www.taxpayeradvocate.irs.gov/).

Example timeline (typical victim path)

  • Days 1–7: Discover fraud (IRS notice, rejected e-file, or unexpected refund), call IRS and the FTC, file Form 14039.
  • Weeks 2–8: IRS initiates manual review, requests documents; you supply verification, police report, and FTC affidavit.
  • Weeks 8–12+: IRS completes review and clears the case; refund issues if you are owed one. (Times vary; some cases take longer.)

Practical documentation checklist

  • Copy of any IRS letters.
  • Completed Form 14039 and supporting documents.
  • FTC identity-theft report and recovery plan (from IdentityTheft.gov).
  • Police report copy.
  • Proof of identity (driver’s license, passport, birth certificate).
  • Copies of tax returns, W-2s, 1099s for the affected years.

Helpful authoritative links and resources

Internal resources on FinHelp.io

Professional disclaimer: This article is educational and does not constitute tax, legal, or financial advice. For personalized guidance about your tax account, consult a qualified tax professional or attorney.

In my practice over 15 years helping clients recover from tax-related identity theft, the single most useful habits I recommend are (1) file early, (2) document every contact with the IRS, and (3) get an IP PIN when eligible. Those three steps dramatically reduce the odds a thief gets your refund and speed recovery when fraud occurs.