Tax return identity theft: What you need to know to protect yourself this filing season

The official start of tax filing season is only nine days away, and identity thieves are getting ready.

The IRS says 1.6 million Americans were victims in the first half of last year. That's more than the total number of victims for all of 2012.

The federal government is calling the issue an "epidemic."

CBS News business analyst Jill Schlesinger explained the scam usually works like this: A thief will send an email or a text that appears to be from the IRS. But the thing is, the IRS doesn't send texts or emails.

"There's a link, people click on the link, not knowing, then there's malware that goes onto your computer," Schlesinger said. "A little bit of information is extracted -- your name, your address, your Social (Security Number) -- and then the thieves actually file a tax return which claims a refund, and they divert that refund into a bank account. So basically someone is filing a tax return on your behalf without you even knowing and pocketing your money."

If you get any sort of notification from the IRS, forward it to the IRS at phishing@irs.gov.

Schlesigner said, "The IRS will never contact you via email."

However, if you do get duped, you should take a number of steps to protect yourself and inform the proper authorities. 

"Obviously, the IRS has now been informed, but you now need to actually inform the credit reporting agencies -- the big ones -- you need to go to the FTC and put a freeze on your account," Schlesinger said. "You have to have some credit monitoring, and you've got to file a police report. Sometimes the IRS will do this for you, you should do it anyway."

Looking ahead to filing season, Schlesinger said, the IRS claims that people make fewer errors through electronic filing. Only one percent of filers, according to the IRS, make errors, versus a paper return in which 20 percent contain errors.

To further protect yourself against tax identity theft, Schlesinger recommends filing your tax return early, protecting your Social Security number, and monitoring your credit reports yearly


  • Amanda Cochran

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