Guidance for Dealing with Identity Theft and Your Tax Return

During this past tax season we had an issue with a client where it was apparent that an identity theft occurred.

Here are some important guidance and resources regarding identity theft and its impact on your tax returns and other tax-related information.

Warning Signs That Identity Theft has Affected Your Taxes

Identity thieves often will use a stolen Social Security Number (SSN) to file a forged return and attempt to secure a fraudulent tax refund. You may only become aware of this when you attempt to file your own return or the IRS sends you a letter indicating that: (1) more than one tax return for you was filed; (2) you have a balance due, refund offset or collection action against you for a year you did not file a return; or (3) IRS records indicate you received wages from an employer unknown to you. Also, the IRS never contacts taxpayers by e-mail to request personal or financial information.

Steps to Take if you are the Victim of Identity Theft

• Respond immediately to any IRS notices and call the IRS number on the notice or contact the IRS’s Identity Protection Specialized Unit (IPSU) at 1-800-908-4490.

• Complete IRS Form 14039, Identity Theft Affidavit (and include a photocopy of at least one of the following: passport, driver’s license, Social Security Card, valid U.S. Federal or State government issued identification).

• Contact your local police and credit bureau (Equifax 1-800-525-6285, www.eqifax.com; Experian1-888-397-3742, www.experian.com; TransUnion1-800-680-289, www.transunion.com).

• If you previously contacted the IRS but have not resolved the matter, you should contact the IPSU at 1-800-908-4490.

How to Protect Your Tax Records

If you think you may be at risk due to a lost/stolen wallet, credit card or other breach of personal information, contact the IPSU at 1-800-908-4490. The IRS will take steps to protect your tax account information.

Special Steps for Filing Your Tax Return

If you have been the victim of identity theft, the IRS will issue you a six-digit Identity Protection Personal Identification Number (IPPIN) that you must use when you file your return. The PIN can only be used once and a new one will be issued each year if needed. You must obtain a new PIN if you lose it.

Special Procedures for Deceased Taxpayers

To further prevent fraudulent returns, the IRS uses special procedures to block processing if a return is filed for a taxpayer who died more than 12 months prior to the filing. The filer must contact the Social Security Administration (SSA) to correct the date and then provide the IRS with:

• a copy of the IRS notice;

• a written request to unlock the account;

• a photocopy of a passport, driver’s license, Social Security Card, or valid U.S. Federal or State government issued identification;

• an original SSA letter (SSA Letter 2458) showing the correction; and

• a tax return with original signatures.

 

Beals, Caruana & Company, P.C.