tax_fraud_picTwo years at about this time, I got this dreaded call from my tax preparer:

“Someone has already filed a fraudulent tax return using your Social Security number. I can’t e-file your return,” he told me.

Within a few weeks, dozens of my friends were in the same boat. We later learned that a data breach related to our kids’ school may have been the culprit. The company hired to do parent-volunteer background checks for our school had apparently exposed us all to tax fraud.

The good news in our family’s case was that the thieves didn’t get any money. My husband and I owed federal and state taxes. (Ok, so that was the bad news!) But as a result, there was no refund for the fraudsters to snatch.

However, safeguarding my identity and credit became almost a part-time job for the next month or so. Here’s what I learned, just in case it happens to you. Take care of all of these steps as soon as possible—like within a few days or a week.

Notify the IRS right away.
Call their Identity Protection Specialized Unit at 1-800-908-4490. Do it when you have some time and full battery on your phone: You could be on hold, waiting for an agent, for several hours. I kid you not.

The IRS will take your information and let you know your next steps. The IRS agent who helped me (thanks, David S.) was incredibly helpful and sympathetic—not what I expected at all. If you are due a refund and the thieves got it, though, it could take six months or more to get your money, I’m sorry to say.

File an identity theft tax affidavit.
It’s IRS Form 14039. You’ll need to mail this form back to the IRS to confirm that you’re actually you. Send it along with a paper copy of your tax return, because you won’t be able to electronically file this year. Next year, you’ll either use a special Personal Identification Number (PIN) you get from the IRS, or your previous year’s Adjusted Gross Income (AGI) from your tax form to confirm your identity.

File a police report and FTC affidavit.
I filed my police report by phone, using my city’s non-emergency number. I picked up a printed copy of it a few weeks later. You’ll want copies of these two reports for other steps. Also file a complaint with the Federal Trade Commission (FTC) online or call 1-877-438-4338. Keep copies of this report, too.

Check your credit reports.
As a victim of identity theft, you’ll have free access to your reports. You should check all three agencies: Equifax, TransUnion and Experian to make sure the identity thieves didn’t do any damage beyond your tax return. Review all of the accounts listed on your report to make sure they’re actually yours. If you see any mistakes or accounts you don’t recognize, follow the credit agency’s directions for disputing them.

Request a fraud alert.
When you contact the first of the three credit reporting agencies, request that a fraud alert be put on your credit file. This first agency will alert the other two. Just in case the identity thieves try to open a credit card or take out a loan in your name, the fraud alert makes that much tougher.

Think about freezing your credit.
This is a more secure way to safeguard your credit identity than an alert. You’ll need to apply for credit freezes separately at each of the three credit reporting agencies (Equifax, TransUnion and Experian). In most states, this process is free for victims of identity theft. This is when you may need copies of your police report and FTC affidavit.

You’ll need to mail each agency a formal credit freeze request, along with several forms of identification. Within a few weeks, you’ll receive a special code from each agency in the mail. Anytime you need to temporarily “thaw” your credit to apply for credit, you’ll use this PIN.

After the freeze, consider removing fraud alerts.
My personal experience has been that keeping the fraud alerts on your reports—on top of the credit freezes—makes it more of a hassle if you apply for a credit card or loan. So keep the freeze, but delete the fraud alert by mailing a request to each credit-reporting agency.

From now on, stop getting tax refunds.
Just to be safe, adjust your withholding or hold back a little of your estimated taxes so you owe the IRS a little money when April 15 rolls around. That way, anyone who tries to file for a tax refund using your SSN will be sorely disappointed!

File your taxes early.
Get that return in as quickly you can. You may beat thieves to the punch.

Also, you can now get copies from the IRS of any fraudulent tax returns on which you were listed as either the primary or secondary taxpayer. This may help you see how much other information the scammers accessed.

Always, always safeguard your Social Security number.
You already know not to carry your SS card in your wallet. But go a little further. For instance, ask your child’s school how they safeguard your personal information. Question any person or organization that asks for your SSN. Can they identify you in another other way? I don’t even put number on medical intake records any more. No one has challenged me. I say: Better safe than sorry!

Image credit: Pictures of Money