Tax identity theft: How to protect your credit and finances

Tax-related identity theft is a persistent problem in the US. In fact, the IRS’s Criminal Investigation Division reported that it identified $2.3 billion in tax fraud in fiscal year 2020, with the fraud ranging from cyber crimes to tax-related identity theft.

Have you fallen victim to tax identity theft and need help dealing with the financial ramifications? Or do you just want to learn ways to prevent it from happening to you? Either way, this guide can help.

What is tax identity theft?

Tax identity theft occurs when someone files a tax return using your Social Security Number (SSN). In some cases, thieves do this in order to claim a fraudulent tax refund. In others, they may have used your SSN to obtain employment. When this occurs, their employer will report all income to the IRS using that SSN. When you don’t report that same income on your own return, the IRS will flag it as suspicious and require you to pay taxes on that additional income. It may even lead to a tax audit.

Victims of tax identity theft face serious financial ramifications. Not only are they unable to file their own returns (or claim their tax refund), but other financial vulnerabilities might

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