Tax Identity Theft: How to Protect Yourself Before You File

Every tax season, scammers race to file fraudulent returns using stolen Social Security numbers — hoping to collect a refund before the real taxpayer files.

If it happens to you, the first sign is often a rejected e-file or a confusing letter from the IRS about income you never reported.

Here's how tax identity theft works, how to protect yourself before you file, and what to do if it's already happened.

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What Is Tax Identity Theft?

Tax identity theft happens when someone uses your name and Social Security number to:

• File a fraudulent tax return and claim your refund
• Report fake wages or self-employment income under your SSN
• Claim dependents or credits using your information

Because tax returns are processed largely on a first-filed basis, whoever files first using your SSN gets processed first — which is why early filing is one of your best defenses.

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Warning Signs of Tax Identity Theft

Watch for these red flags:

• The IRS rejects your e-filed return because one was already filed using your SSN
• You receive an IRS notice about wages from an employer you've never worked for
• You get a notice saying you owe additional tax, or that your refund was offset to pay a debt you don't recognize
• You receive a transcript or tax-related letter you didn't request
• Your online IRS account shows activity you didn't initiate

If any of these happen, don't ignore it — fraudulent tax filings often indicate your SSN has been compromised elsewhere too.

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How to Protect Yourself Before Filing

1. File as Early as Possible

The earlier you file a legitimate return, the less time scammers have to file one first. If you're expecting a refund, there's little upside to waiting.

2. Get an IRS Identity Protection PIN (IP PIN)

An IP PIN is a 6-digit code issued by the IRS that must be included on your tax return. Without it, the IRS will reject any e-filed return submitted under your SSN — even a fraudulent one.

• Anyone with a Social Security number can request an IP PIN through the IRS's online tool
• It's free and renews automatically each year
• This is one of the single most effective protections against tax-related identity theft

3. Watch for IRS Impersonation Scams

The IRS does not:

• Call demanding immediate payment
• Threaten arrest or deportation over the phone
• Request payment via gift cards, wire transfer, or cryptocurrency
• Text or email asking you to "verify" personal information by clicking a link

Any message claiming otherwise is a scam — hang up, don't click, and don't respond.

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4. Freeze Your Credit

While a credit freeze doesn't directly stop tax fraud, it's part of the same broader protection — if your SSN has been exposed, freezing your credit at all three bureaus prevents it from being used to open new accounts too.

See our guide: How to Freeze Your Credit at All 3 Bureaus

5. Monitor for SSN Misuse Year-Round

Tax fraud is often just one symptom of a stolen SSN — the same information can be used for new credit accounts, loans, or government benefits fraud at any time of year. Continuous SSN monitoring helps you catch misuse closer to when it happens, rather than discovering it months later when the IRS rejects your return.

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What to Do If You're Already a Victim

If the IRS has rejected your return or you've received a suspicious notice:

1. File Form 14039 (Identity Theft Affidavit) with the IRS
2. Mail your paper return along with the completed Form 14039
3. Report it at IdentityTheft.gov — the FTC will generate a personalized recovery plan
4. Request an IP PIN (if you don't already have one) to prevent future fraudulent filings
5. Check your credit reports for any other accounts opened using your information

Recovery can take months, which is exactly why prevention — filing early, using an IP PIN, and monitoring your SSN — matters so much.

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Why Tax Season Is Prime Time for Identity Thieves

Tax season concentrates a huge amount of sensitive data — SSNs, income, addresses, bank account numbers for direct deposit — into a short window. Combined with the urgency of filing deadlines, it's also peak season for IRS impersonation phone calls, phishing emails, and fake "tax refund" text messages.

The same stolen data fueling tax fraud often comes from data breaches that happened months or years earlier. If you've never checked whether your information has been exposed, now is a good time — see our Aura review for how continuous monitoring works, and our Aura pricing guide for plan details.

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Bottom Line

Tax identity theft is preventable in most cases:

• File early
• Get an IP PIN from the IRS
• Never trust unsolicited calls, texts, or emails claiming to be the IRS
• Freeze your credit if your SSN has been exposed
• Monitor your identity year-round, not just during tax season

If something does go wrong, acting quickly — Form 14039, IdentityTheft.gov, and an IP PIN — significantly shortens your recovery time.