I had to call a client who had visited the free Volunteer Income Tax Assistance (VITA) site. The Social Security number for her dependent child had been rejected and the tax return couldn’t be filed electronically. Our first step was to rule out a data entry error; when none was found, it was clear the number had already appeared on another return. Misuse of a child’s social security number, even by a family member, is a form of identity theft.
Parents who encounter the problem should contact the three credit bureaus and ask for a manual check using the child’s name and social security number. If evidence is found that identity theft has occurred in other ways in addition to false claims on a tax return; then steps can be taken to prevent additional violations. These steps include notification of identity theft to the IRS, which will issue a personal pin each year a return is filed using the stolen social security number.
Even if there is no evidence of identity theft, parents should check their child’s credit report at age 16, giving them ample time to correct errors before the file is used for student loans and other adult credit applications. Details of how to check a child’s records can be found by visiting the Federal Trade Commission website.
The personal pin is just one step being used to reduce fraudulent claims on a tax return. Adults will be asked for valid driver’s license numbers in some test locations this year and social security numbers on W-2 forms will be truncated, X’s replace the first 5 digits, beginning in 2016.