Tax Season Alert: Protect Yourself From Identity Theft Risks

As the new tax season nears, taxpayers are at an increased risk of identity theft.

National Taxpayer Advocate, Erin M. Collins released the 2024 Annual Report to Congress last week. It highlights several ongoing issues. Among the most pressing concerns are the delays in processing Employee Retention Credit (ERC) claims and resolving identity theft victim cases.

The report calls the agency's delays in addressing identity theft cases "unconscionable."

By law, the report must identify the 10 most serious issues taxpayers face with the IRS and suggest administrative and legislative solutions.

In Fiscal Year 2024, the IRS took nearly two years on average to resolve identity theft cases and issue refunds to victims, affecting almost half a million taxpayers. The report highlights a worsening trend compared to FY 2023, when cases took nearly 19 months to resolve.

Collins recommends that the IRS prioritize identity theft cases by keeping staff from the Identity Theft Victim Assistance (IDTVA) staff focused on them during tax season and resolving them within 90 days or less.

Here are 3 ways taxpayers can protect themselves from identity theft in 2025, according to The Hill.

File Taxes Early

With massive online security breaches becoming more common, it's important to assume that your personal information could be in the wrong hands. Filing your taxes early helps prevent thieves from filing a fraudulent return in your name.

"Don't wait until April 15. Don't wait till October 15. Get your return in, and then no one else can file after it," tax attorney Adam Brewer says. "The other way to do it is file electronically, because you could file the first week of February, but if you file by paper it might sit there for a couple weeks, couple months even."

Use IRS Identity Protection PIN

The IRS offers an Identity Protection PIN (IP PIN) to help safeguard your personal information. This six-digit number is known only to you and the IRS, and it prevents thieves from using your Social Security number or taxpayer identification number to file a return.

If you've been a victim of identity theft in the past, you'll receive a new PIN each year. However, even if you've never had your identity stolen, you can proactively request an IP PIN from the IRS to further protect yourself.

File Your Taxes, Even If Not Required

If you're not legally required to file taxes, you might still want to consider doing so. Filing a return can help prevent criminals from using your name to file a fraudulent one.

For example, if you're a Social Security recipient or someone with a very low income below the filing threshold, not filing leaves the door open for a thief to step in.

Steps to Take If Your Identity Is Stolen

Here are the steps you can take if someone has filed taxes under your name or your dependent's name.

Brewer explains that if a fraudulent refund was issued, the IRS might request something like a police report. While it may not lead to immediate results, submitting a report can help support your claim to the IRS that your identity was stolen.

Brewer also points out that once someone files a fraudulent return electronically under your name, you won't be able to file using the same method.

To file an identity theft affidavit with the IRS, submit a support ticket, or request a personal PIN. Visit the IRS website for detailed guidance.