With your name, birth date, and social security number, I can ruin you.  Now I wouldn’t– I have laws to follow and a code of ethics too, but basically those are all the tools an identity thief needs to ruin your life.

Scary isn’t it?  And how easy is it to get that information?   Got a Facebook page?  There’s your name.  Did you post your birthday on it for all your friends?  That’s two.  The social security number is harder to get—or at least it should be.

Do you have a driver’s license that uses your social security number as the ID number?   Do you keep your social security card in your purse?  Both of those practices are extremely dangerous.

Why am I obsessing over identity theft in my tax blog?  It’s a really hot issue in taxes this year.  Fake tax returns reflecting huge refunds have risen exponentially, and the IRS is having a hard time fighting the phenomena.  I’ve written about children’s identities being stolen for tax returns before, but the issue of adult identities being stolen is what has really caused problems this past season.

Here’s the thing:  A fraudulent tax return gets filed in your name with a large refund.   You go to file your taxes, maybe you even owe, but you can’t file because your identity has already been claimed.  Next thing you know, you’re under criminal investigation for tax fraud.  Ugly, isn’t it?  You don’t want this to be you.

What can you do?   Prevention is the best.  Guard your social security number like your life depended upon it.  It does.  Take your birthday down from your Facebook page.   My apologies to everyone who’s sent me requests to sign up for the birthday club—sorry, I just won’t do it.

If you do get hit, be sure to report it right away.  Even if the police will do nothing about your case, you’ll have the fact of reporting it on file.  If you’ve been the victim of identity theft for tax purposes, you’ll need to fill out the IRS Identity Theft Affidavit, Form 14039.  Here’s a link to get it:  http://www.irs.gov/pub/irs-pdf/f14039.pdf.

Even if you haven’t been affected by tax identity theft, if your purse has been stolen and your social security number is at risk, you should contact the IRS before a problem comes up.  You can call this number for assistance:  1 800-908-4490.  That’s the IRS Identity Protection specialized Unit.  They can take steps in
advance to protect your account.

I worked on an identity theft case years ago, before it was a common problem.  It was a nightmare—because not only had the man’s identity been stolen, but the IRS was charging him with fines, penalties, and tax fraud for getting a huge tax refund for claiming some children that weren’t his.   It all started with an IRS letter asking him if Billy and Susie were his children.  He responded back saying , “No,”  he didn’t have any children at all.  He wasn’t thinking about identity theft, he was thinking that maybe an old girlfriend was trying to pin paternity on him for some kids that weren’t his.   He had no idea that it was the beginning of a tax problem that took over a year to solve.

He hadn’t filed a tax return for that year due to lack of work, so he was a good candidate for identity theft.  Once the IRS determined that the return as fraudulent, they weren’t looking for someone else—they went to my client who happened to have the name and social security number on the tax return.   Like I said, it was a nightmare.

So be careful.  Protect yourself and your social security number.  You’ll be glad you did.