What you need to know:

• Tax refund fraud is when someone uses your personal information to file a false tax return and steal your refund.
• The SCDOR has several processes to fight tax fraud, including mailing some taxpayers a notice asking them to verify their identity using the SCDOR’s free and convenient online tax portal, MyDORWAY.
• The SCDOR and the SCDCA have tips for preventing tax fraud and protecting your identity.

The South Carolina Department of Revenue (SCDOR) and the South Carolina Department of Consumer Affairs (SCDCA) are urging taxpayers to be on guard against tax-time identity theft and tax refund fraud, which is when a fraudster uses someone else’s personal information to file a false tax return to steal their refund. It’s important to take proactive measures to protect your identity and to respond promptly if the SCDOR contacts you about your return and refund.

The SCDOR uses a variety of security measures to protect taxpayers’ personal information and prevent tax refund fraud, including checking for signs of fraud as the first step of processing a taxpayer’s South Carolina Individual Income Tax return. In some instances, the SCDOR may mail taxpayers an Identity Verification Notice as part of this process. Last year, the SCDOR sent more than 54,000 of these letters to taxpayers in an effort to verify their identities.

Most taxpayers who receive an Identity Verification Notice aren’t expecting it, but it’s an important step in fighting tax fraud and ensuring taxpayers get the correct refund. If you receive one of these notices, be sure to respond promptly so the SCDOR can resolve the issue and send you your refund.

How to respond to an Identity Verification Notice

The SCDOR’s Identity Verification Notices ask taxpayers to verify their identity one of two ways:

• Individual Code Verification – You may be asked to verify your identity using a PIN. To do this you will need:

• The verification code from the letter
• Your last name
• The state refund amount from the South Carolina return for the tax year on the letter

• Identity Verification Quiz – Other taxpayers will be asked to verify their identity using a quiz. To complete the quiz, you will need:

• The Letter ID from the notice you received in the mail
• The last four digits of the primary filer’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
• The state refund amount from the South Carolina return for the tax year on the letter
• Your current and last year’s tax returns

Both the Identity Verification Quiz and the Individual Code Verification are accessible by visiting MyDORWAY.dor.sc.gov and clicking Verify My Identity on the homepage.

What other Identity Verification methods are available?

The Identity Verification Notice also gives taxpayers the option of sending in identity verification documentation by email, fax, or mail. Instructions are included on the Identity Verification Notice, though the SCDOR strongly encourages you to use MyDORWAY, if possible. It’s the fastest, safest way to validate your identity with the SCDOR.

What happens if you fail to validate your identity?

If you do not validate your identity with the SCDOR, your return will be removed from processing until the matter is resolved. This means you will not receive any refund due until you are able to verify your identity, so it is important not to ignore your Identity Verification Notice.

The primary reason taxpayers say they did not respond to the verification notice is that they have moved since filing their return and did not update their mailing address with the SCDOR. Be sure the SCDOR has your updated address if you have moved recently.

Tips for protecting your identity

The South Carolina Department of Consumer Affairs (SCDCA) has tips for protecting your identity from online thieves:

• When filing online, use anti-virus software and ensure your computer is connected to a secure internet connection. Use strong and unique passwords and enable multi-factor authentication whenever possible. Do not use public Wi-Fi.
• Don’t respond to requests for personal information from phone calls, texts, emails, or online pop-ups.
• Consider opting in to the IRS Identity Protection PIN (IP PIN) program, a free added layer of protection. The IP PIN is a six-digit code known only to the individual and the IRS. Use the Get an Identity Protection PIN tool to get an IP PIN. Never share your IP PIN with anyone but a trusted tax provider.
• If using a tax preparer, make sure your preparer is reputable, licensed, and has a Preparer Tax Identification Number (PTIN) from the IRS. Review the SCDOR’s tips for choosing a tax preparer and visit irs.gov or call 800-906-9887 to see if you qualify for free tax prep services provided by IRS-certified volunteers.
• Fraudsters often pose as the IRS or SCDOR to scare and trick you into disclosing personal information or sending them money. Remember, the IRS and SCDOR will not call about taxes without sending a notice through the mail first. Report IRS imposter scams to the Treasury Department. 
• If you believe your identity has been stolen, the SCDCA recommends you place a fraud alert or a security freeze on your account, monitor your bank and health care statements for suspicious activity, and contact them at 800-922-1594.

Learn more

Visit the SCDOR's Security Center and the IRS’s Identity Theft Central, then download the SCDCA's free scam guide "Ditch the Pitch." Connect with the SCDOR on Facebook, Twitt​er, and YouTube and subscribe to ReveNews to stay up-to-date with the latest news, tax tips, and available resources. 

About SCDCA
The South Carolina Department of Consumer Affairs aims to protect consumers from inequities in the marketplace through advocacy, complaint mediation, enforcement and education. To report scams and ID theft, call SCDCA's Identity Theft Unit at 1-844-TELL DCA (835-5322) or visit consumer.sc.gov and click the Identity Theft Unit tab.

About the SCDOR
The South Carolina Department of Revenue aims to administer the revenue and regulatory laws of the State with integrity, effectiveness and fairness to all taxpayers, while maintaining the highest security and the protection of taxpayer information. Find more resources for the tax season at dor.sc.gov/iit.