Steps to Recover Your Tax Account After Identity Theft

Quick checklist

• Report tax-related identity theft to the IRS (Form 14039).
• File an identity-theft report at IdentityTheft.gov (FTC) and get a recovery plan.
• Place a fraud alert or credit freeze with the major credit bureaus.
• Secure bank accounts, change passwords, and enable multi-factor authentication.
• Keep a single, dated file of every letter, form, call note, and receipt.

Why acting fast matters

Identity theft that affects your tax account can delay refunds, trigger audits, or create false liabilities. Quick, documented action reduces the chance of ongoing misuse and helps the IRS separate fraudulent returns from your legitimate history (IRS: Taxpayer Identity Theft).

Step-by-step recovery process

1. Report the theft to the IRS with Form 14039

• Submit Form 14039, Identity Theft Affidavit, so the IRS knows the return filed under your Social Security number was not authorized by you. You can attach the completed form to a paper return or follow the instructions on the form page if you received IRS correspondence telling you to file the affidavit (IRS: Taxpayer Identity Theft). Keep a copy for your records.

1. File a report with the FTC at IdentityTheft.gov

• The Federal Trade Commission’s site creates an official identity-theft report and step-by-step recovery plan you can download and share with creditors or the IRS (IdentityTheft.gov / FTC). This report is often accepted as evidence of identity theft.

1. Place a fraud alert or credit freeze

• Contact one credit bureau (Equifax, Experian, or TransUnion) to place an initial fraud alert; they must notify the other two. Consider a credit freeze if you want stricter protection—freezing your credit prevents most new accounts from being opened in your name.

1. Secure bank, payroll, and benefit accounts

• Close or add extra verification to any financial accounts that show suspicious activity. Notify your bank, credit-card companies, and payroll department if direct-deposit details changed or unauthorized payments occurred.

1. Check and correct tax transcripts and IRS notices

• Review IRS notices carefully. If the IRS sends a notice showing a return you didn’t file, follow the notice’s instructions and include Form 14039 if directed. Request tax transcripts via IRS tools or by mail to review the activity associated with your SSN.

1. Consider an Identity Protection PIN (IP PIN)

• An IP PIN is a 6-digit code the IRS uses to verify your identity and help stop fraudulent returns filed with your SSN. If you’re a confirmed victim of tax-related identity theft, the IRS can issue an IP PIN. Check the IRS Identity Theft pages for eligibility and application instructions (IRS: Identity Theft Central).

1. If a refund was issued to a thief

• If a fraudulent return resulted in a refund, the IRS will investigate and may adjust your account. Keep copies of your own filed returns, W-2s, 1099s, and proof of your identity. Resolving refund fraud can take weeks to months depending on complexity.

1. File or re-file your tax return if needed

• If you haven’t filed and the IRS hasn’t accepted a return in your name, file your legitimate return on time. If a fraudulent return was filed and the IRS rejects your e-file, you may need to file a paper return and include Form 14039 and supporting identity documents. Keep proof of mailing.

1. Report SSN misuse to the Social Security Administration when appropriate

• If someone used your Social Security number for work or benefits, report it to the SSA. They can check earnings records and advise next steps.

1. Work with professionals for complex cases

• If identity theft triggers complex tax liabilities, multiple fraudulent years, or business-account fraud, get help from a tax practitioner experienced in identity-theft cases or an attorney who handles identity-theft remediation.

Documentation to collect and keep

• Copies of Form 14039 and any IRS correspondence.
• Your FTC identity-theft report and recovery plan from IdentityTheft.gov.
• Police reports, if you filed one.
• Credit reports showing suspicious accounts or inquiries.
• Copies of legitimate tax returns, W-2s, 1099s, and evidence of filing dates.
• Notes of phone calls: name, agency, date, and summary.

Keeping a chronological file helps the IRS and creditors resolve disputes faster.

What to expect from the IRS and typical timelines

• The IRS must research suspected identity-theft returns and will route confirmed identity-theft cases to a specialized unit. Investigations can take several weeks to months; more complex cases may take longer. The IRS provides status information on its website and may request additional documentation.

• If your case is confirmed, you may receive an Identity Protection PIN, removal of fraudulent liabilities, and restored refund access. Stay on top of follow-up notices and respond promptly to any IRS requests.

Credit and security actions beyond the IRS

• Order free credit reports at AnnualCreditReport.com and review them for new accounts, unfamiliar inquiries, and collection accounts tied to identity theft.

• Place extended fraud alerts or freezes with each credit bureau as needed.

• Change online passwords to strong, unique phrases and enable multi-factor authentication on sensitive accounts (email, bank, tax software).

• If checks were stolen, work with your bank and consider placing stop payments and ordering new checks.

Common mistakes to avoid

• Assuming the IRS or creditors will notice and fix the problem without your involvement.

• Throwing away letters from the IRS—these often include instructions and deadlines that matter.

• Giving out additional personal data to unverified callers who claim they can speed up IRS processes. The IRS will not initiate contact by email, text, or social media to request personal tax information.

When to get professional help

• If you face identity theft spanning multiple tax years, if fraud created large tax liabilities, or if a business EIN was used, retain a tax attorney or experienced Certified Public Accountant (CPA). In my practice, cases resolved faster when clients provided organized documentation and authorized a single representative to speak with the IRS.

Practical example (short)

A client found a tax return had been filed in their name. We filed Form 14039, submitted an FTC report, froze credit, and requested IRS tax transcripts. Because we had organized W-2s and pay records, the IRS cleared the fraudulent return and issued an IP PIN for subsequent seasons. The whole process took about three months from detection to restored filing access.

Useful resources

• IRS — Taxpayer Identity Theft: https://www.irs.gov/newsroom/taxpayer-identity-theft
• IRS — Identity Protection (including IP PIN information): https://www.irs.gov/identity-theft
• IdentityTheft.gov (FTC) — Report and recovery plan: https://www.identitytheft.gov
• Consumer Financial Protection Bureau — Identity theft resources: https://www.consumerfinance.gov/

Related FinHelp articles:

• Identity Theft and Tax Accounts: Recovery Path and Timeline — https://finhelp.io/glossary/identity-theft-and-tax-accounts-recovery-path-and-timeline/
• What to Do If You Receive a Notice of Identity Theft from the IRS — https://finhelp.io/glossary/what-to-do-if-you-receive-a-notice-of-identity-theft-from-the-irs/
• Handling Identity Theft-Related Tax Returns: Steps to Recover Your Refund — https://finhelp.io/glossary/handling-identity-theft-related-tax-returns-steps-to-recover-your-refund/

Frequently asked questions (short answers)

• How long will recovery take?
  Timelines vary. Simple cases can take weeks; complicated cases often take months.

• Will I get a new Social Security number?
  The SSA rarely issues new SSNs. Recovery typically focuses on correcting records and preventing future misuse.

• Can I still file taxes while under an identity-theft investigation?
  Yes. File your legitimate return. If e-file is blocked, file a paper return and include Form 14039 and supporting documentation.

Final note and disclaimer

This guide explains general steps to recover your tax account after identity theft and is not personalized legal or tax advice. For advice tailored to your situation, consult a tax professional, attorney, or the IRS directly. Authoritative information is available from the IRS and the FTC (links above).