Filing tax returns electronically is fast and easy – but there are risks.

Encouraged by the IRS, many Americans file their tax returns electronically and have refunds deposited directly into bank accounts. E-filing is appealing because it provides confirmation that the return was filed on time and, when combined with direct deposit, can result in a refund as soon as seven days later.

Still, there are hazards associated with e-filing. Tax-identity theft, refund fraud, and return-preparer fraud are growing ever more common, and are difficult to deter. Evidence of fraud is hard to find: There are no signed forms, hand-addressed envelopes, or fingerprints, and your quick refunds can disappear just as quickly. Unfortunately, credit-monitoring services are no help in combatting tax-identity theft.

Tax-identity theft has risen drastically — to more than 1.1 million cases in 2011 from 51,700 in 2008, with a current backlog of 650,000 cases — and the IRS has done little to help prevent it. If you wish to file electronically, visit www.irs.gov and request and electronic filing personal identification number (PIN). Be sure to use the PIN according to IRS instructions when you file. You can also file Form 14039, Identity Theft Affidavit, if you wish, to request additional return-screening by the IRS (though this may delay your refund).

If you do become a victim, immediately seek a referral to the IRS Identity Protection Specialized Unit or the Taxpayer Advocate Service using Form 911, which is available on the IRS website.