As Tax Day Approaches, Identity Theft a Growing Threat

Tax season opens the door for fraudsters.

Tax preparation
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Also make your personal information difficult to find in the event your car or home is burglarized. "Burglars are the new digital criminals," says O'Farrell. "They're much more interested in your Social Security number than your flat-screen TV, and they could have it written on the palm of their hand without anyone knowing."

If you believe you've been the victim of tax-related identity theft, your first step is to notify the IRS. Then, if you've worked with an accountant, contact him or her. You may also want to file an identify theft affidavit with the Federal Trade Commission.

[See Tax Time: Changes You Need to Know.]

Unfortunately, sorting out an identity-theft issue with the IRS can take months, as Kealing attests. "I probably talked to five different people at the IRS," he says. "It's going to take a while and you have to wait for them to resolve the identify-theft issue before you can move forward."

Unfortunately, once you've worked things out with the IRS, the attacks may not end there. If an identity thief has your information, be on the lookout for other issues with your Social Security, credit cards, or bank accounts by checking your statements regularly. You may want to use your identity theft affidavit to get a free credit freeze so no one can open new accounts in your name; you can temporarily unfreeze your credit if you'd like to open a new account yourself (sometimes for a small fee).

"Once your Social Security number is out there, you're probably going to be fighting this forever," says O'Farrell. "One of the biggest costs of identity theft is the fear of what's going to happen next."