Someone Filed a Fraudulent Tax Return in My Name - What to Do Now

You went to e-file your tax return and got rejected because someone already filed using your Social Security number. Or worse—the IRS sent you a notice saying you owe taxes on income you never earned. Welcome to the unfortunate world of tax identity theft.

The good news: The IRS deals with this constantly and has a clear process. The bad news: It's going to delay your refund and require paperwork. Here's how to handle it.

STEP 1: CONFIRM IT'S ACTUALLY FRAUD

How Do You Know Someone Filed a Fraudulent Return?

• IRS rejection: Your e-filed return is rejected because your SSN was already used
• Unexpected notice: IRS says you owe taxes on income you didn't earn
• Refund taken: You're expecting a refund but IRS says it was already issued
• IRS letter 5071C or 4883C: IRS suspects fraud and needs verification
• Transcript shows unfiled returns: Your IRS transcript shows returns you never filed

Before You Assume Fraud, Check These:

• Did your spouse file without telling you? (It happens more than you'd think)
• Did your tax preparer already submit it?
• Did you file last year and forget? (Also happens)
• Is the notice for a different tax year?

STEP 2: FILE IRS FORM 14039 IMMEDIATELY

STEP 3: FILE YOUR LEGITIMATE TAX RETURN (ON PAPER)

STEP 4: CALL THE IRS IDENTITY PROTECTION SPECIALIZED UNIT

STEP 5: FILE A POLICE REPORT

Why bother? While not required by the IRS, a police report:

• Creates an official record
• Helps if you need to dispute credit issues
• May be required by banks or creditors
• Strengthens your IRS case

How to File a Police Report for Tax Identity Theft:

1. Go to your local police department (in Apple Valley: 14400 Civic Drive)
2. Bring: IRS notice, Form 14039, copy of prior year return
3. Explain you're a victim of tax identity theft
4. Get a copy of the report and report number

STEP 6: PROTECT YOUR CREDIT

STEP 7: MONITOR YOUR IRS ACCOUNT

Get Your IRS Transcripts Regularly

Check your IRS account transcript every few months to catch fraud early:

• Online: IRS.gov → "Get Transcript"
• By mail: Call 800-908-9946
• What to look for: Returns filed that you didn't file, income from employers you've never worked for

WHAT HAPPENS NEXT?

The IRS Investigation Process:

1. Assignment (Week 1-4): Your case is assigned to an IRS identity theft specialist
2. Verification (Week 5-12): IRS verifies your identity and investigates the fraudulent return
3. Removal (Week 13-20): IRS removes the fraudulent return from your account
4. Processing (Week 21-26): Your legitimate return is processed
5. Refund (if applicable): You finally get your refund

Realistic timeline: 6-12 months for the entire process

YOU'LL RECEIVE AN IP PIN FOR FUTURE FILINGS

After resolving your identity theft case, the IRS will issue you an Identity Protection PIN (IP PIN)—a 6-digit code you'll need to file your tax return each year.

About Your IP PIN:

• When you get it: Mailed in January each year
• What it does: Prevents anyone from filing a return with your SSN without this PIN
• How to use it: Enter it on your tax return when filing
• Lost it? Retrieve it at IRS.gov or call 800-908-4490

HOW THIS HAPPENS (AND HOW TO PREVENT IT)

Common Ways Tax Fraudsters Get Your Information:

• Data breaches: Equifax, healthcare providers, employers—SSNs leak constantly
• Phishing scams: Fake IRS emails or calls
• Mail theft: Stealing W-2s from mailboxes
• Inside jobs: Dishonest tax preparers or office workers
• Dark web purchases: Buying stolen SSNs

Prevention Tips:

• File early: Fraudsters can't file if you already did
• Use IP PIN voluntarily: Even if not required, you can opt in at IRS.gov
• Secure your mailbox: Use a locked mailbox or PO Box during tax season
• Shred tax documents: Don't just throw away forms with SSNs
• Never give SSN over phone/email: The IRS never calls or emails requesting SSNs
• Monitor IRS transcripts: Check 2-3 times per year
• Protect against W-2 scams: Employers should verify requests for W-2s

SPECIAL SITUATIONS

What If You Owe Taxes on the Fraudulent Return?

You are NOT responsible for taxes on income you didn't earn. Once the IRS resolves the identity theft case, any balance due on the fraudulent return will be removed from your account.

What If the Fraudster Used Your Child's SSN?

Same process—file Form 14039 for your child, file their legitimate return (if they have filing requirements), and notify the IRS. The IP PIN program extends to dependents.

What If It's a State Tax Return Fraud?

Contact your state tax agency (California Franchise Tax Board: 800-852-5711). The process is similar but separate from federal.

THE BOTTOM LINE

Tax identity theft is a pain, but it's not the end of the world. The IRS knows how to handle it—you just need to follow their process:

1. File Form 14039 immediately
2. Paper-file your legitimate return
3. Call the IRS Identity Theft hotline
4. File a police report
5. Freeze your credit
6. Be patient—it takes 6-12 months

And next year? File early, use your IP PIN, and watch your mail.

Remember: You will get your legitimate refund eventually, and you won't be held responsible for the fraud. It's frustrating and time-consuming, but the system works—it just works slowly.