Identity Theft - It Happened To Me

Summary

NOTE: I am not an accountant nor a lawyer. None of this is legal or financial advice.

So in early February I received an email from MyAlabamaTaxes that I received a letter from the state. I didn’t expect this, so I immediately became suspicious. I logged in and there was a letter essentially stating that they needed additional information for my tax return. Well, since I had not filed my taxes yet, it became obvious that I had issues.

1. I logged into my IRS account to see if there was a return added there. There was not.

2. I called the Alabama Dept of Revenue. I only waited about 5mins and explained the situation. They quickly removed the fraudulent return and told me the only impact to me was to file my taxes by mail this year. Not too impactful.

I informed my accountant and life went on. Fast forward about a month, when we are ready to file my taxes, my federal e-file was rejected because ‘it had already been filed'. Except it hadn’t.

1. I immediately went and applied for my IP PIN - and if you don’t have one, you should too. It’s essentially MFA for your tax return.

2. I logged into my IRS account - still no record of a filing.

3. I looked up, on the IRS website, what to do in this scenario. Here is where things got interesting. I only waited for about 30mins to speak to someone. I explained the situation, and they initially advised me to follow the instructions on the website. However, they informed me that filing form 14039 for ID theft would kick off an ~9mo review process. They then told me to hold. When they came back they said that my file was already flagged and I should be receiving a letter asking me for additional info. They told me that I should respond online to the instructions in the letter. They put me on hold, then came back again. This time she said she took care of it for me and I can just manually file my return and not to include form 14039. Now my return would only take the normal 6 weeks.

TBD - I still have a few steps to complete here and will update once I have the full conclusion of this. Fingers crossed that I really can just get the 6 week version of filing.

So all this to say, if this happens to you, call the IRS first before following their instructions on the website. Also, I’m a little on the paranoid side and this still happened….

Why This Was Minimally Impactful

Like I said, I’m pretty paranoid when it comes to my finances and identity. Here are the things I had in place already, yet this still happened. Thought, at least so far, it has been almost uneventful.

1. I keep mine and my wife’s credit files perpetually frozen. They have been frozen for years. Here is a good resource from Krebs on credit freeze.

   1. NOTE: after this incident I also froze my dependents files as well, which you have to do via mail if they are under 16.

2. Setup accounts for my wife and I on the social security website with MFA

3. Setup ID.me on the IRS website

4. I have unique usernames and passwords for each of my financial institutions as well as MFA where possible.

5. I receive a text any time my credit card is used for anything over $50

6. I keep my debit cards locked. Essentially I never use them. If an account is compromised I don’t want to front the money.

Things I added since this incident started

1. Added IP PINs for IRS filing

2. Froze the credit files for my dependents

Conclusion

It is now obvious that this can happen to anyone regardless of the steps taken. The only recourse is to limit the impact to it.