Identity Theft Impacting Your Taxes
Below is a MRR and PLR article in category Finance -> subcategory Taxes.
Identity Theft and Its Impact on Your Taxes
Overview
Identity theft can wreak havoc on your finances, and one lesser-known consequence is its impact on your taxes.
Understanding Identity Theft
Typically, identity thieves steal personal information to make unauthorized credit card charges or set up fraudulent accounts. A newer trend involves schemes that affect your tax filings.
Selling Social Security Numbers
A concerning development is the selling of Social Security numbers. Why would someone buy yours? A surprisingly diverse group does, including undocumented workers, individuals with poor credit, and those seeking a new identity. This can lead to significant issues, as any income they earn might be reported to the IRS under your name, resulting in inflated income reports and potential audits for underreporting.
With the implementation of the Real ID Act, often referred to as the National ID Card, the situation may worsen. All employees will need to provide Social Security numbers to secure jobs, increasing the demand for these numbers due to issues like border control.
False Tax Filings
Filing a tax return is relatively simple. What's stopping an identity thief from filing one in your name to claim a refund? Unfortunately, not much. They might claim frivolous deductions to maximize the refund, leaving you to deal with the resulting audit.
What You Can Do
If you suspect that someone has used your Social Security number fraudulently, it's crucial to contact the IRS immediately. Watch for signs such as:
1. Notices indicating multiple tax returns filed in your name.
2. IRS records showing wages from an unfamiliar employer.
Don’t hesitate to reach out. The IRS is aware this is a growing issue and is there to assist, not penalize, affected taxpayers.
You can find the original non-AI version of this article here: Identity Theft Impacting Your Taxes .
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