By Julie Myhre-Nunes, NextAdvisor.com
As someone who writes, researches and obsesses over identity theft, I've always taken pride in my ability to keep my personal information secure. I take all of the necessary security steps to protect my identity, like cross-shredding my junk mail and bills, removing and shredding all labels from packages I receive, using a credit card for all purchases (because they offer more fraud protection), installing Internet security software on any and all devices I use, opting not to use public Wi-Fi, enabling two-factor authentication for every account that will allow me to use it and more, so it came as quite a shock when I learned on Monday that I became a victim of tax identity theft.
How did I find out?
Most victims of tax identity theft learn about it from the IRS, as they'll receive a note in the mail explaining that two returns have been filed with their social security number and they need to call to sort it out. This wasn't my experience, as I inquired about my return before the IRS sent the letter. Here's how everything panned out.
Once I received all of the necessary paperwork to file my return, I jumped on the opportunity, as I'm quite aware of the consequences of filing later in the season. So, on Feb. 14 I sat down with my husband and we filed electronically. On Feb. 15, we received an alert that our return was accepted, so I did my happy dance and assumed I went another year untouched by identity thieves. A couple of days went by before I started using the IRS' Where's My Refund tool to check up on our refund. As time stretched on and it grew closer to the 21-day deadline -- the time frame in which the IRS says most people receive their refund -- I started to get a feeling that something must be wrong.
On Monday, 22 days since we filed, I called the IRS to find out what's going on. I was connected with an agent who told me that our return had been flagged for an unspecified reason (she assumed it was my name change) and directed me to call another department. Thinking it was a minor hiccup, I went on with my day and planned to call that night after work. When I got home, I jumped on the phone to make sure I took care of it before the IRS closed (you might think it's an agency that never sleeps, but you'd be wrong). After explaining what I'd been told earlier in the day, I was asked for my personal information -- everything from my home address to my social security number -- and told I'd need to pull up a copy of both my 2014 and 2015 tax returns.
Once I had them pulled up, she asked me very specific questions, like "What does line 72 on the 2015 return read?" and "What was your home address on your 2014 tax return?" to verify my identity. After I answered all of them correctly -- I have to admit, it was a little stressful -- I was put on hold while the agent filed some paperwork. By this time I already assumed what had happened, and when she came back on the phone, she confirmed my fears, telling me that a fraudulent tax return was filed in my name earlier in the tax season -- so the real return was put on hold. Since I called before I received a letter about the fraud, it was all taken care of right then and there. My legitimate return will be processed soon.
What did I do to alleviate the fraud?
Although I wish I could say that I kept my cool after learning such news, that wasn't completely the case. After a couple minutes of panic, I visited the IRS' Taxpayer Guide to Identity Theft, as directed by the IRS agent, and began to go through the detailed steps, most of which I already knew from the identity theft research we do at NextAdvisor.com. Here's what it told me to do:
1. Report the fraud to the FTC. This was something I already knew, as it's a must-do for people who fall victim to any type of fraud or identity theft. Because the IRS agent told me she handled the fraudulent return for me, I first thought this wasn't a step that I needed to take. Then, after some research, I learned filing an affidavit with the FTC was an essential step because it will help me prove to businesses or creditors that my identity was stolen. Also, if you create an account while you file the affidavit, the bureau also creates a list of things you need to do to protect your identity, which I found very helpful. The FTC also suggested that I fill out an Identity Theft Affidavit with the IRS, but this was something the agent said I didn't need to do since the bureau is already aware of the theft and has taken steps to alleviate it.
2. Check my credit reports. While I had identity theft protection at one time, I canceled it in the fall to cut back on some of my monthly expenses -- bad idea on my part. As such, I opted to initially check my credit reports through AnnualCreditReport.com, which allows you to legally obtain one copy of each credit report per year.
An additional step I chose to take to protect my identity, as well as my husband's, was to sign up for identity theft protection. There are a couple of reasons why I chose to do this. First, I want to make sure I keep track of my credit reports so I know what's going on with them at all times -- AnnualCreditReport.com only lets you check once per year. Second, while the optimistic part of me thinks the thief will only use my information to file a tax return, the reality is someone has my social security number and other sensitive personal information, which means the type of accounts they can open in my name are seemingly limitless. As such, I want to make sure I have a group of professional people on my side, along with helpful tools and information, to help mitigate the situation if more fraud occurs. Because I wanted protection for both myself and my husband, and I'd had a membership with this service in the past, I signed up for Identity Guard's couple plan.
3. Place a fraud alert or credit freeze on my reports. Either a fraud alert or a credit freeze would be beneficial in this instance. I opted for the former because I'm planning to open a new line of credit soon, which means I need some flexibility. After I open that line of credit, I plan to change the alert to a freeze so I can be sure my credit reports are safe. Not sure what a fraud alert or credit freeze is or how to decide between them? We have a guide on credit freezes as well as one for fraud alerts.
4. Report any fraudulent accounts as such. I was lucky enough that the fraud only impacted my tax return, at least as far as I can tell. Unfortunately, this isn't the case for everyone, as identity thieves will often use the information they have to open credit cards, utility accounts, mortgages and any other account they can get their hands on. If this is the case, the victim should make sure they report all fraudulent accounts as soon as possible. In addition to enlisting the help of Identity Guard, as detailed above, I'm also making sure I check my bank and credit card statements daily and reporting fraudulent transactions as soon as I spot them. I'm also in the process of changing all the passwords for my online accounts, as I'm not completely sure how or where my information was breached.
What was the worst part of this experience?
There are two things that really bothered me about this whole experience. The first is feeling like I've been violated. Knowing someone out there not only has my social security number and other personal information, but also used it for their personal gain is like a punch in the stomach. The second is the lack of urgency I felt from the IRS. While the IRS agents were helpful, I was frustrated that they didn't automatically offer up information on what the next steps would be. Instead, I had to seek out the information myself, which thankfully wasn't that difficult since I'm familiar with the topic of identity theft. That said, if I was an average taxpayer who knew nothing about identity theft, I would have felt lost and overwhelmed.
How can you avoid falling victim like me?
There are a couple of ways to avoid falling victim to tax identity theft, as detailed in this blog post, but the most important is to file your taxes as soon as possible. While this is easier said than done, as you often have to rely on your employers, banks and other institutions to send you all of the necessary information in order to file, it's still something to aim for, as you're more likely to beat the thief if you file earlier. Another action I would suggest taking is to check up on the status of your return regularly. I was able to catch the tax identity theft before the IRS alerted me to it because I stayed on top of my return and checked the status of my refund regularly. A simple check in or call to the IRS can go a lot further than you may think.
Want to learn more about identity theft? Keep up with our identity theft protection blog to learn more ways to keep your identity safe during tax season and throughout the whole year.
This blog post originally appeared at NextAdvisor.com.