Data breaches and subsequent identity theft are unfortunate but common occurrences today and have only increased since the onset of the pandemic.
Cybercriminals leverage the personal information they steal in a variety of ways, but two of the most common identity crimes committed are the filing of IRS income tax returns to request a tax refund and false unemployment benefit claims. In both of these cases, the fillings are made using the victim’s stolen personal information (such as Social Security Numbers) while the destination for the funds is the cybercriminal’s bank account. Victims may only become aware of the fraud when they attempt to file taxes or for benefits and are denied due to a preexisting filing. Ascend Technologies has gathered some information to help educate, prevent and respond to these specific incidents.
IRS Taxpayer Identity Theft
GENERAL INFORMATION
Income tax-related identity theft occurs when someone uses your Social Security Number (SSN) to file a tax return on your behalf, thus claiming a fraudulent refund. If you become a victim, the IRS is committed to resolving your case as quickly as possible.
You may be unaware that this has happened until you e-file your return and discover that a return already has been filed using your SSN. Or, the IRS may send you a letter saying it has identified a suspicious return using your SSN.
More information can be found here: Taxpayer Guide to Identity Theft
ILLINOIS: The Illinois Department of Revenue (IDOR) has published an online resource for tax-related identity theft here.
PREVENTION
Since 2021, the IRS offers an Identity Protection PIN (IP PIN) to help prevent taxpayer identity theft. More information is available here: Get an Identity Protection PIN (IP PIN)
Filing your taxes as early as possible is advisable as it can prevent another (fraudulent) return from being filed.
Note: The IRS will never initiate contact with you via email, text message (SMS), or social media.
REPORTING
If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, the IRS recommends these additional steps:
- File a complaint with the Federal Trade Commission (FTC) at IdentityTheft.gov
- Respond immediately to any official IRS notice; call the number provided.
- Contact the three major credit bureaus to place a "fraud alert" on your credit records:
- Equifax, www.Equifax.com, 800-525-6285
- Experian, www.Experian.com, 888-397-3742
- TransUnion, www.TransUnion.com, 800-680-7289
- Contact your financial institutions and close any financial or credit accounts opened without your permission or tampered with by identity thieves.
- Complete IRS Form 14039, Identity Theft Affidavit, if your e-file return rejects because of a duplicate filing under your SSN or you are instructed to do so. Use a fillable form at IRS.gov, print, then attach the form to your paper return and mail it according to instructions.
- Continue to pay your taxes and file your tax return, even if you must do so by paper.
- If you previously contacted the IRS and did not have a resolution, contact the IRS for specialized assistance at 1-800-908-4490. They have teams available to assist.
More information is available at: IRS.gov/identitytheft or the FTC at identitytheft.gov.
Unemployment Fraud
GENERAL INFORMATION (Illinois)
The Illinois Department of Employment Security (IDES) is responsible for the management of state unemployment benefits. It has created a page of resources to help with identity theft and unemployment fraud:
PREVENTION
Consider creating an online benefits account with your state, even if you are employed and do not need to file a claim. This makes it more difficult for scammers to create a new account with your information — and if they try, their actions are more likely to be detected and flagged as fraudulent.
In Illinois, you do not have to register for unemployment to create an account. You can create a username and password by providing your SSN and Driver’s License information. FYI, there is no multi-factor authentication (MFA) option available on the IDES platform, so use a strong 16-character passphrase to protect your account.
Create an IDES account at: https://ides.illinois.gov/
REPORTING
IDES has created a page for reporting unemployment fraud here: IDES: Report Identity Theft Fraud
Methods will vary by state, so we recommend you visit the website of your state government to locate your employment office's online tools, benefits, and fraud reporting procedures.
Disclaimer
Content provided in this guide was drawn from the respective websites mentioned as resources on or before 12/21/2022. Ascend Technologies provides our clients with this information as a courtesy. Ascend Technologies is not a law firm, government agency, or tax advisor. As such, Ascend Technologies cannot be held accountable for any out-of-date or incomplete information. Nothing in this material constitutes legal advice. When in doubt, contact your federal and state authorities directly.
More information can be found here:
FTC Website for Identity Theft Resources
FTC step-by-step guide for victims of identity theft
US Department of Labor Resources for Unemployment Insurance Fraud by State