Identity theft is not a single crime.
You might envision someone stealing your checkbook or credit card numbers, then racking up debt in your name. The reality is thieves can use your identity for a number of different things, including seeking medical care, applying for government assistance and disability, taking out student loans, and more.
A common form of identity theft involves employment. It happens when someone accesses your personally identifiable information and uses it to get a job. Why would someone pretend to be you in order to work? It could be to avoid paying taxes at the end of the year (by earning money and then not having to claim it on their own taxes) or because the individual in question is receiving unemployment or disability benefits and wants to continue those benefits while working. They may even be taking in other types of government assistance like SNAP benefits or subsidized housing, and they want to make sure their new income doesn’t make them ineligible for those benefits.
That’s where you come in. The thief applies for a job with your information, taxes are recorded through their payroll department, and you get stuck footing the bill for their earned income. Your job might pay you $30,000 a year, but you’re about to pay taxes on the criminal’s additional $40,000-a-year job…or your other job, as it looks on paper.
Unfortunately, this crime is more common than you might think. In fact, the IRS recently discovered a computer error that failed to notify a lot of victims; new victims were flagged by the computer and informed that someone else was using their identity for employment, but it didn’t factor in people whose information had been stolen in the past and was being re-used for employment fraud. In 2017, around 500,000 Americans’ identities were used for this crime, but only around 40,000 were flagged by the computer and notified as new victims.
The IRS has received a number of recommendations about how to correct this issue and other identity theft problems, but consumers should also play their part. If you know that your personally identifying information has been compromised in the past, don’t assume it can’t happen again. Not only can it be used again, it can be sold to another criminal. File your tax returns as early as possible so any issues can be caught. Finally, monitor all your account statements carefully and take immediate action if anything suspicious occurs. Contact the Identity Theft Resource Center for toll-free, no-cost assistance at (888) 400-5530.
For on-the-go assistance, check out the free ID Theft Help App from ITRC.