The IRS, which has not been covering itself in glory, as it tries to respond to the multi-billion dollar problem of income tax identity theft recently got something right. In response to a request from New Hampshire Senator Kelly Ayotte, the IRS is changing its policy regarding providing copies of fraudulent income tax returns to victims of income tax identity theft where their names and Social Security numbers were used to file fraudulent income tax returns seeking phony refunds. Believe it or not, until now the victims of income tax identity theft were prevented from seeing the income tax returns filed using their names and Social Security numbers because it violated the privacy rights of the criminals who filed those returns. Pursuant to the IRS’ new policy, the victims of income tax identity theft will now be able to see those returns, which can provide a window through which the victims can see the extent of the theft of their personal information and put the victims in a better position to understand the extent of the harm, which is the first step in remedying the problem.
The two best things you can do to protect yourself from becoming a victim of income tax identity theft are to file your income tax return as early as possible to beat the identity thief to the punch. If you file before the identity thief does, the identity thief’s return will not be accepted by the IRS. The second thing everyone should do is to protect the privacy of your Social Security number as much as possible. The more places that have your Social Security number, the more you are in jeopardy of identity theft. Also, never carry your Social Security card with you in your wallet or your purse. Having your cash stolen is much less of a problem than having your identity stolen and if your Social Security number falls into the hands of an identity thief, the crime is all but done.