How to Identify the Warning Signs of Tax Refund Fraud

With tax season in full swing, people looking to receive a tax refund this year should be aware of thieves stealing their identification and filing a phony tax return in their name. This practice is commonly known as tax refund identity theft. Learn the warning signs and take action to protect your identity during tax time.

Data breaches in recent years – both large and small – have served millions of personal data points to cybercriminals, including names, addresses, Social Security numbers and email addresses. This type of personal information is valuable during tax season, when attempts are made to use stolen Social Security numbers to file fraudulent tax returns to obtain refunds.

According to the Internal Revenue Service (IRS) approximately 376,000 taxpayers reported falling victim to tax refund identity theft in 2016, a 46 percent drop from 2015.1

"While the declines are promising, taxpayers should remain aware that tax refund identity theft is still possible, even as the IRS plans to roll out additional safeguards for the 2018 tax filing season," said Trevor Buxton, certified fraud examiner and fraud awareness manager at PNC Bank.

The most important point every taxpayer needs to remember is that the IRS will first contact you in writing through the United States Postal Service (USPS) – not by telephone, email, or other electronic means – if they need to get in touch with you.

Learn the Warning Signs

Common warning signs that indicate you may be a victim of tax refund fraud include:

  • Rejected return: If an identity thief files a fake tax return for a refund, any additional returns filed using the same Social Security number will be rejected. If the IRS or tax preparer notifies you that your return has been rejected due to a previously-filed return under the same Social Security number, you may be a victim. Consider monitoring the status of your tax refund through the "Where's My Refund?" online tool at
  • Strange wages: Identity thieves will file false tax returns using employer data which does not match with your true employer. You may be a victim if IRS records indicate you received wages or other income from an employer that you didn't work for.
  • Additional collection attempts: The IRS or a tax professional may notify you in writing about additional taxes owed, collection action taken against you or a refund reduction due to unpaid debts known officially as a refund offset. While honest mistakes happen among legitimate taxpayers, it could also indicate a fraudster using your Social Security number.
  • Unpaid taxes in your minor child's name: Identity thieves can use a child's Social Security number to file fraudulent tax returns and secure fraudulent credit and debt that can often go undetected for years. If you receive an IRS notification about unpaid taxes in your child's name, it may indicate their identity has been stolen.

Protect Your Identity

You can take the following measures to protect personal data and reduce the risk of tax refund identity theft:

  • File your taxes early, before an identity thief has the chance to use your information to claim a return in your name.
  • Use security software with firewall and anti-virus protections when accessing the Internet.
  • Use strong passwords for online accounts – at least 10 characters, alphanumeric, mixed case and special characters. Never repeat passwords across multiple accounts.
  • Spot and avoid suspicious emails, text messages and phone calls.
  • Never click links or download attachments from suspicious emails.
  • Keep your Social Security cards and tax records safe and secure at all times.

Report Tax Refund Identity Theft

If you suspect that you're a victim of tax refund fraud, there are steps you can take. Whether you've received a written notification from the IRS or you have noticed suspicious activity, you'll need to contact the IRS directly.

  • Respond immediately to a legitimate IRS notice; call the number provided.
  • Complete IRS Form 14039 (Identity Theft Affidavit), attach it to your tax return and mail according to instructions.

To learn more about protecting your personal and financial information, visit the Security and Privacy page on