Quick overview

Tax-related identity theft happens when a thief uses your personal information (commonly your Social Security number) to file a fraudulent federal or state tax return or to claim someone’s refund. The IRS treats this as serious fraud and has special procedures for prevention and recovery. This article gives clear, practical steps you can take to reduce risk and what to do if you become a victim.

Why this matters now

Tax filing is increasingly electronic and automated, which makes filing faster — and also creates opportunities for criminals to file returns in someone else’s name. In my 15 years helping clients with tax and financial issues, the common thread in successful outcomes is fast action: rapid detection, documented reporting, and consistent follow‑up with tax and credit agencies.

Preventive steps you can take today

  1. Protect your Social Security number (SSN)
  • Treat your SSN like a bank PIN. Don’t carry your Social Security card in your wallet and avoid giving your number unless legally required.
  • Limit what you share on social media; thieves use personal details to answer account‑recovery questions.
  1. File early
  • File your federal tax return as soon as you have the necessary documents. Many identity thieves file early in the season to beat the real taxpayer to the refund.
  1. Request an Identity Protection PIN (IP PIN)
  • The IRS issues a six‑digit IP PIN to confirmed victims and offers an opt‑in program for many taxpayers (the Get an IP PIN tool at the IRS helps eligible filers). An IP PIN prevents someone else from filing a federal return with your SSN. (See IRS Identity Theft Central: https://www.irs.gov/identity-theft-central)
  1. Secure your digital life
  • Use strong, unique passwords and a password manager.
  • Turn on multi‑factor authentication (MFA) for email and financial accounts.
  • Avoid public Wi‑Fi for transmitting tax documents without a trusted VPN.
  1. Limit paper exposure
  • Opt for e‑delivery of sensitive documents when possible and shred old tax records, W‑2s, and 1099s before disposal.
  1. Monitor financial and tax accounts
  • Check bank and credit card statements regularly for unfamiliar charges.
  • Review your IRS account online and watch for notices. Consider a free annual credit report and, if warranted, a security freeze with the three major credit bureaus.
  1. Use reputable preparers and software
  • Verify your tax preparer’s credentials and tax identification number. Use trusted e‑file software and services, and keep copies of engagement letters and signed returns.

How tax-related identity theft typically happens

  • Data breaches at companies or through malicious apps or phish emails expose SSNs and other identifiers.
  • Stolen mail or discarded paper records provide enough data to file a return.
  • Criminals buy personally identifiable information (PII) on the dark web and use it to file returns for refunds.

Signs someone may have filed taxes in your name

  • You get an IRS notice that a return was filed under your SSN, or the IRS rejects your e‑file because a return with your SSN already exists.
  • You receive a wage‑and‑income notice listing wages you didn’t earn.
  • You see tax‑related inquiries on your credit report or a sudden hold on your IRS account.

Immediate steps if you suspect tax-related identity theft

  1. Don’t ignore IRS notices. Read them carefully and follow the instructions. The IRS sends specific guidance when it detects suspected fraud. (IRS Identity Theft Central: https://www.irs.gov/identity-theft-central)

  2. File Form 14039 (Identity Theft Affidavit) when required

  • Use IRS Form 14039 if the IRS instructs you to submit an affidavit. Include copies of requested ID and documentation that shows you did not file the return in question. Keep copies of everything.
  1. Report the theft to IdentityTheft.gov
  • The Federal Trade Commission’s IdentityTheft.gov provides a recovery plan, generates a report that can be used with the IRS and credit agencies, and helps you create an FTC Identity Theft Affidavit if needed. (https://www.identitytheft.gov)
  1. Place a fraud alert or freeze on your credit files
  • Contact one of the major credit reporting agencies (Experian, TransUnion, or Equifax) to place an initial fraud alert; a security freeze is stronger and prevents new credit in your name.
  1. Contact your tax preparer and financial institutions
  • Let your tax preparer, bank, and credit card companies know about the identity theft so they can add protections and monitor accounts.
  1. File a police report if necessary
  • If the theft involved stolen mail, falsified documents, or other criminal acts against you, a local police report can support your claims with the IRS and credit bureaus.

The IRS’s recovery process and what to expect

  • The IRS has an Identity Theft Central page with guidance on evidence to submit, processing expectations, and where to get help (https://www.irs.gov/identity-theft-central). When the IRS confirms tax‑related identity theft, they will not hold the victim responsible for a fraudulent return but resolving the account can take several weeks to months.
  • You may be issued an IP PIN to protect future tax filings. Keep copies of all correspondence and any case ID numbers the IRS provides.

Documentation checklist for recovery

  • A copy of the IRS notice you received (if any)
  • A completed Form 14039 if requested by the IRS
  • A report from IdentityTheft.gov or a police report (if available)
  • Copies of your government‑issued ID and Social Security card (only when requested by the IRS or law enforcement)
  • Proof of residency (utility bill) if ID verification is needed

Mistakes to avoid

  • Don’t ignore small signs (a rejected e‑file, a strange IRS letter). Early response limits damage.
  • Don’t respond to unsolicited callers who claim to be from the IRS; the IRS will usually first contact you by mail.
  • Don’t post copies of sensitive documents online, even in closed forums.

Practical examples from practice

  • A self‑employed client discovered an early‑season fraudulent return filed in their name. We immediately filed Form 14039, reported the theft at IdentityTheft.gov, and applied for an IP PIN. Because we documented the case promptly and used the IRS steps, the client avoided a lengthy dispute over income and received guidance on next steps. Quick documentation and persistence with both the IRS and the tax software vendor were critical.

Internal resources on FinHelp.io

How long will it take to resolve?

Resolution times vary. Simple cases (you file first, or the IRS flags and rejects a duplicate) can be resolved in weeks. Complex cases (multiple fraudulent filings, identity theft tied to other fraud) may take months. Keep records and follow up regularly — if the IRS asks for documentation, send it promptly.

Final checklist: 7 quick actions

  1. File early and securely.
  2. Apply for an IP PIN if eligible.
  3. Secure your SSN and personal documents.
  4. Use strong passwords and MFA.
  5. Monitor credit and IRS accounts.
  6. Report suspected theft to IdentityTheft.gov and the IRS.
  7. Keep copies of all communications and documentation.

Professional disclaimer
This article is for educational purposes and reflects general best practices as of 2025. It does not replace personalized legal, tax, or financial advice. If you believe you are a victim of tax‑related identity theft, contact the IRS (see Identity Theft Central), the FTC at IdentityTheft.gov, and a qualified tax professional.

Notes on sources and authority
This article references IRS guidance available at the IRS Identity Theft Central, FTC resources at IdentityTheft.gov, and materials from the Consumer Financial Protection Bureau. For the latest instructions and forms, consult the IRS website directly: https://www.irs.gov/identity-theft-central.