Watch Out for Income Tax Refund Fraud!

Tax refund fraud is one of the fastest-growing forms of identity theft. A thief steals your identity, then uses it to file a bogus tax return with the IRS. The return includes a very generous refund, which is paid to the thief. The thief files the return early in the year before you have a chance to do so.

The refund is sent directly to the thief. Once the fraud occurs, you’re prevented from filing your tax return. You’re notified that it’s already been filed. It’s a messy situation, but fortunately, it can be resolved cleanly. The IRS is aware of the problem and works with taxpayers to get it resolved.

You need to file IRS form 14039, Identity Theft Affidavit, and attach any necessary documentation. You may be asked to supply your state issued ID card or driver’s license. The process can take up to six months, but once it’s completed, your tax situation will be corrected. That will include the proper tax refund or liability, based on your actual return.

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