How to Protect Your Tax Refund from Being Stolen

Learn how to prevent tax refund scams and keep your refund safe.

Identity theft isn’t limited to criminals opening credit cards and running up debt in your name — your tax return is also at risk. During the 2016 tax filing season, over 237,000 people filed affidavits with the IRS stating they were the victims of identity theft; at the same time, the Internal Revenue Service stopped an additional 787,000 false tax returns from wreaking havoc. Although the IRS has been working diligently since 2015 to counteract fraudulent returns, you are the first line of defense in keeping your data and identity safe from criminals.

Don’t make the mistake of taking action only during tax season: Stay vigilant year-round to keep your personal information safe. Then when tax time comes, scammers won’t already have the information they need to file a fake return and gain access to your money. Find out what you need to know to protect your tax refund from identity theft.

How to Prevent Tax Refund Theft

Criminals make it their business to find ways to uncover and exploit your personal information — and you can make it your business to stop them. Here are some steps you can take to protect your identity and your tax refund:

  1. Never respond to an email, text or social media contact claiming to be from the IRS. The IRS only initiates contact with taxpayers by postal mail. Forward any suspicious or fraudulent contacts to phishing@irs.gov.
  2. Don’t give your financial information to anyone who calls claiming to be with the IRS. The caller might threaten arrest or deportation, but don’t be intimidated. Instead, report these calls to the IRS by calling 800-366-4484 or via the IRS Impersonation Scam Reporting website.
  3. Protect your personal identity information throughout the year. Always keep your Social Security number and other personal data well-protected to minimize the chances of unauthorized access. When online, use strong passwords and security software, and never click on suspicious links or downloads. Additionally, learn about phishing scams and how to avoid them.
  4. Check your credit report regularly to detect fraudulent activity. Although you are entitled to receive a free copy of your each of your credit reports annually from AnnualCreditReport.com, you can also sign up for a free or premium credit-monitoring service. Sometimes credit card companies will provide this type of service to cardholders as a perk.
  5. Don’t ignore tax documents that you receive. A W-2 from an employer you didn’t work for can indicate that your identity might have been stolen.
  6. Don’t wait until the last minute. Instead, file your tax return as early as reasonably possible so that criminals can’t file one first, reports CNBC. To help you file as early as possible, go over your prior year’s returns and make a list of all the documents you need to file and create a checklist. Also, keep your receipts throughout the year, so they’re available when you’re ready to file.

Learn: How to Report Tax Fraud

Recovering From a Stolen Tax Refund

It’s important to take swift action if you are a victim of tax-identity theft. Follow these steps to report tax fraud:

  1. Complete IRS Form 14039, Identity Theft Affidavit, to report that your tax return was rejected because there was a duplicate tax return filed using your Social Security number.
  2. Respond immediately to any notice you receive from the IRS in response to your affidavit. You can also call the agency at 800-908-4490 for specialized identity theft assistance.
  3. Contact all of your financial institutions to alert them that you’ve been a victim of identity theft.
  4. File a complaint with the Federal Trade Commission at identitytheft.gov to report identity theft.
  5. Put a fraud alert on each of your credit records at the three major credit bureaus:
  • Equifax: 866-349-5191
  • Experian: 888-397-3742
  • TransUnion: 800-680-7289

Up Next: 6 Reasons Why Your Refund Will Be Late This Year

  • Helen

    The IRS is actually pretty quick with addressing tax fraud scams, it happened t my husband once and they helped us rectify the issue.

  • Lorilu

    Medicare cards have your Social Security number on them. Carry a copy of the card, with the SS number deleted, and leave the original at home unless you know you will need it, such as for a planned medical procedure.

  • FoundingFathersGhost

    Can you prevent this, or at least the damage from it, by making sure that you don’t have a tax refund? If you owe the government money, then what is there to steal?

  • iyamacog

    How is it possible for someone’s personal savings accnt held when he/she is a victim of tax fraud?