As the tax filing deadline draws near, a growing threat is quietly impacting taxpayers across the country: tax identity theft. It’s a problem that often goes unnoticed until it’s too late—and resolving it can be a long and frustrating process.
Recently, our CEO, David King, spoke with ABC7 about what’s happening on the front lines. At Optima Tax Relief, teams process tens of thousands of IRS notices every day, offering a unique window into emerging tax issues—including a noticeable rise in identity theft cases.
A “Stealthy” and Fast-Moving Crime
One of the most challenging aspects of tax identity theft is how quietly it happens. In many cases, a fraudster files a tax return using someone else’s personal information and collects the refund before the real taxpayer even submits their return.
Victims often don’t realize anything is wrong until they attempt to file and are told their refund has already been issued. By then, the situation has escalated into a complex case with the IRS.
Who Is Most at Risk?
While anyone can become a victim, certain groups are more vulnerable. Individuals who don’t regularly file taxes may be less likely to detect suspicious activity early. They might only discover the issue after receiving an unexpected IRS notice or bill.
Another growing concern is employment-related identity theft. In these cases, someone uses another person’s Social Security number to secure a job. The result? The victim is left dealing with unreported income and potential tax liabilities they didn’t incur.
Long Resolution Times Add to the Challenge
Fixing a tax identity theft case is not a quick process. Due to IRS backlogs and staffing challenges, resolution can take up to two years. During that time, taxpayers may face delays in refunds, ongoing correspondence, and significant stress trying to prove their identity and correct their records.
A Simple but Powerful Layer of Protection
One of the most effective tools available to taxpayers is the IRS Identity Protection PIN (IP PIN). This unique six-digit number adds an extra layer of security to your tax return, helping prevent unauthorized filings under your name.
Why Risks Increase Near the Deadline
As the April filing deadline approaches, the volume of tax returns surges. While the IRS works to process millions of filings, fraud detection doesn’t always happen in real time. Each year, millions of returns are flagged for potential identity theft, but not all fraudulent filings are stopped before refunds are issued.
This makes the final stretch of tax season a particularly high-risk period for taxpayers.
How to Protect Yourself
Taking proactive steps can significantly reduce your risk of becoming a victim:
- File your tax return as early as possible (but make sure you have all the necessary documents)
- Monitor IRS notices and your tax records closely
- Safeguard your personal and financial information
- Request an extension if you’re not ready to file by April 15
Staying alert and acting early are key to avoiding complications during tax season.
Click here to watch the full ABC7 interview with David King to learn more about how tax identity theft is evolving and what you can do to protect yourself.