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For taxes this year I'm going to owe the IRS, not get a refund, and I won't have any W-2 (although my wife will). So I'm curious what would happen if someone used this Equifax breach to file my tax return to try to get a refund.

As an aside: How do typical fraudulent tax returns work with a W-2 employee? Do fraudsters have to steal your W-2s as well as your SSN? If not, how can the return be valid if it doesn't match the W-2s sent to the IRS?

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When a thief submits a fake tax return in your name, it doesn't matter whether you actually owe taxes in real life or not. The thief will make up numbers and claim a refund. The IRS typically sends out refund checks before verifying that everything claimed on the return is accurate. It is later that the IRS goes through each return and decides which returns need to be audited for accuracy.

So the amount on your W-2s is irrelevant for the thief.

Remember, if this should happen to you, the thief has not stolen from you; they have stolen from the U.S. Government. You are not personally out this money, and you will still be given the opportunity to file your correct tax return.

As mentioned by Michael in the comments, some scammers were using FAFSA's IRS Data Retrieval Tool to obtain W-2 amounts to provide more accurate information on the fraudulent return. Currently, the tool is disabled while they work at making it more secure.

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  • True, but doesn't it flag your returns for a long time (forever?) so you have to jump through far more hoops to verify your identity every year?
    – Matt Chambers
    Sep 13, 2017 at 17:15
  • I stand corrected: "IRS begins matching employer-reported W-2 data to tax returns in July, following the tax season"
    – D Stanley
    Sep 13, 2017 at 18:19
  • @DStanley The IRS probably does do some simple data checking, and they probably do more checking each year than the last. I, of course, am not an expert on defrauding the IRS, but I would imagine that a thief probably submits lots of fraudulent tax returns, and the IRS catches many of them as fake, and a few get through, making it profitable for the thief.
    – Ben Miller
    Sep 13, 2017 at 18:19
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    @DStanley+ more importantly, Congress changed the law to move up the W-2 deadline as proposed (also 1099-MISC for contractors), so this processing year for the first time IRS could do 'real-time' matching. See irs.gov/newsroom/… Although IRS on their own also tries to detect 'suspicious' returns, with mixed results.
    – dave_thompson_085
    Sep 13, 2017 at 21:11
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    No. We had a fake tax return filed in our name. The fraudster used the IRS FAFSA tool, and the amount they claimed as 2016 income was exactly the amount reported on my 2015 W-2.
    – Michael
    Sep 14, 2017 at 6:27

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