Tax fraud takes many forms. Even when you aren’t instigating it, you may be on the receiving end of tax-related identity theft, IRS impersonation scams, shady tax preparation schemes, fraudulent requests for personal information and more.

Tax season is a good time to review the basics of protecting yourself from identity theft and avoiding scams in general. In particular, be on the lookout for these warning signs of tax fraud and tax-related identity theft.

3. You Receive a 1099-G for Unemployment Benefits You Didn’t Collect

In a similar vein, you may receive a Form 1099-G reporting unemployment benefits. If you didn’t collect unemployment during the year, someone may have used your identity to file for unemployment, then had the income reported to the IRS in your name. Don’t report fraudulent 1099-G income on your tax return; the IRS will investigate independently. Do consider reporting unemployment identity theft to the U.S. Department of Labor.

4. The IRS Asks You to Verify Your Identity

If the IRS receives a suspicious tax return, they may send you Letter 5071C or 6331C, asking you to confirm your identity using the IRS’s online Identity and Tax Return Verification Service. The IRS won’t process your tax return or issue a refund until you’ve verified your information.

If you haven’t filed a return yet, let the IRS know as soon as possible. You can indicate this during the online verification process. Or call the Taxpayer Protection Program hotline number shown in your letter if you prefer using the phone to verify your identity and notify the IRS that you haven’t filed a return (if that’s the case).

5. You Get a Phone Call From the IRS

As a general rule, the IRS doesn’t make unsolicited calls to taxpayers. If they have an issue with your tax file, they’ll send a letter or bill via the U.S. mail.

Officially, the IRS website says it does not: “Initiate contact with taxpayers by email, text or social media to request personal or financial information; call taxpayers with threats of lawsuits or arrests; or call, email or text to request taxpayers’ Identity Protection PINs.”

Additionally, IRS agents do not demand payment over the phone or insist that you purchase gift cards to pay your tax bill. If you get an abusive phone call from someone impersonating the IRS, hang up. You can also report the call to the Treasury Department Inspector General for Tax Administration hotline.

6. Your New Tax Preparer Is Suspicious

Your new tax preparer wants you to sign your tax return before it’s completed, or they ask you to pay the money you owe the IRS directly to them. This is not business as usual, and may be a sign that your tax preparer is planning to file fraudulent information on your return or take your tax payment money and run.

Also avoid ghost preparers, who refuse to sign your return or include their IRS Preparer Tax Identification Number. If their fee is based on the size of your refund, they may use false information to inflate your refund, which may be deflated when the IRS finds the discrepancy.

7. You’re Notified About an Unclaimed Refund

In a recent scam, a special delivery arrives on IRS letterhead that says it’s a notice “in relation to your unclaimed refund.” According to an IRS consumer alert, this notice is a scam. Scammers may request detailed personal information, including photos of your driver’s license, which they may use to steal your identity. If you receive this letter, don’t respond.

8. You’re Urged to File a Fake W-2 Form

Some scammers may try to entice you to commit fraud. A scam circulating on social media suggests using tax preparation software to create fake W-2 forms that show large amounts of income and withholding, which you use on your tax return to generate a refund. Here’s the problem (in addition to the basic problem of committing fraud): The IRS verifies information on W-2 forms. Fake forms won’t pass muster. Filing a fraudulent tax return carries a range of penalties, including criminal prosecution.

9. Your IRS File Is Active, but You Aren’t

You may be at risk for tax-related identity theft if any of the following have happened to you:

• You get a letter from the IRS about a tax return you didn’t file.
• You get a tax transcript in the mail that you didn’t request.
• You get an IRS notice that an online account has been created in your name, but you didn’t create it.
• You get an IRS notice that your existing online account has been accessed or disabled when you haven’t taken these actions.
• You get an IRS notice that you owe additional tax, your refund is being offset or you are having collection actions taken against you for a return you didn’t file.
• You’ve been assigned an Employer Identification Number, but you didn’t request one.

Download the IRS’ Identity Theft Information for Taxpayers for tips on identifying and dealing with tax-related identity theft. Contact the IRS identity theft unit at 888-627-3349 if you need help resolving an issue.

The Bottom Line

Most taxpayers file and pay their taxes without incident. However, if you suspect you’ve been the victim of tax-related identity theft or another tax scam, be safe. Don’t respond to scam phone calls, letters, emails, social media messages or texts. If your tax preparer seems shady, walk away. Alert the IRS to any suspicious activity, including fake tax returns or tax forms, or IRS account activity that isn’t you.

Because identity thieves may also use your information to open credit card accounts or take out loans, you should also check your credit report at all three credit reporting agencies. You can access all three reports for free at AnnualCreditReport.com. You also have the right to add fraud alerts or security freezes to your credit files to help prevent identity thieves from using your information to access credit. Finally, consider free credit monitoring to receive alerts whenever changes are made to your credit file—a good practice during tax season and all year around.

Banking apps can provide on-the-go access to your accounts and helpful safety features, like notifications and real-time alerts. However, additional access comes with additional risk, and there are a few steps you may want to take to help keep your device and bank account secure.

3. Keep Your Device and Apps Updated

Cybersecurity is often a continuous game of cat and mouse—companies create and expand their defenses as criminals look for new ways to break into systems.

Companies often release security patches with software updates to stop the latest types of attacks, which is why regularly updating your device and apps is important.

You can manually update apps and operating systems on Android and Apple, or turn on automatic updates to help keep yourself safe.

4. Be Cautious When Using Public Wi-Fi

Encryption is now the standard, rather than the exception, with most websites. And connections to your bank accounts via a browser or mobile app will almost certainly be encrypted. As a result, the old rule of thumb to never use public Wi-Fi isn’t necessarily as rigid.

However, it’s better to be safe than sorry. If you have reception, switch off Wi-Fi and use your phone connection to access your banking app.

If your phone’s network isn’t an option, you may want to wait to log in to your bank—or other sensitive accounts—unless you absolutely need to. And consider using a virtual private network (VPN) on your mobile device to add another layer of encryption.

Importance of Regular Credit Report Checks

5. Automatically Turn off and Lock Your Device

If someone gains access to your bank account and routing numbers, they can use the information to fraudulently withdraw or transfer money from your account. They can also create fake checks, claim your tax return or commit other forms of financial fraud.

Your bank account number distinguishes your specific account from the other accounts held by your financial institution. Similarly, your routing number identifies the bank or credit union where the account resides. Together, these numbers are essential for making direct deposits, bill payments, automatic transfers and more.

But if these numbers get into the wrong hands, you could fall victim to severe financial fraud. If someone has your bank account and routing number, they could make unauthorized ACH transfers and payments, create counterfeit checks and even launder money through your account.

Unauthorized purchases online:

Scammers and criminals can run up charges quickly by using your bank account and routing number to make online purchases. Some online retailers make it even easier for criminals to fraudulently use your account by only requiring a bank account number to make purchases.

Real-Life Consequences and Legal Cases Involving CPN Misuse

• Counterfeit checks: Someone can also use your bank account and routing numbers to create fake checks. They can then cash those checks or use them to pay for goods and services. Scammers can deposit funds into their own account either digitally using a smartphone or physically at a bank or ATM.

• Money laundering through your account: Contact your bank immediately if you notice an account deposit you don’t recognize. Someone may be using your account to launder money obtained illegally.

• Identity theft: Criminals can use your banking information and any other personal data they collect to steal your identity. These schemes are often employed to open new credit cards, receive your tax returns and commit other unpleasant forms of fraud.