Although the IRS is trying, it remains relatively ineffective in preventing taxpayer identity theft.
Here is how it works…
Usually, an identity thief uses a legitimate taxpayer’s identity to fraudulently file a tax return and claim a refund. Generally, the identity thief will use a stolen SSN to file a forged tax return and attempt to get a fraudulent refund early in the filing season.
You may be unaware that this has happened until you file your return later in the filing season and discover that two returns have been filed using the same SSN.
Be alert to possible identity theft if you receive an IRS notice or letter that states that:
- More than one tax return for you was filed,
- You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return, or
- IRS records indicate you received wages from an employer unknown to you.
Unfortunately, all of the IRS policies are designed once identity theft has occurred and not preventative. In fact, earlier this month the IRS proposed regulations that would allow us to truncate or mask your social security number when filing or communicating with them.
So what do you do, if there is IRS identity theft?
If you receive a notice from IRS, respond immediately. If you believe someone may have used your SSN fraudulently, please notify IRS immediately by responding to the name and number printed on the notice or letter. You will need to fill out the IRS Identity Theft Affidavit, Form 14039.
For victims of identity theft who have previously been in contact with the IRS and have not achieved a resolution, you can contact the IRS Identity Protection Specialized Unit, toll-free, at 1-800-908-4490.
We will keep you up to date as the IRS implements new procedures to prevent identity theft from happening. In the meantime, please protect your social security number to prevent unnecessary annoyance from happening to you.
If you receive a suspect notice or have been a victim of IRS identity theft, please do not hesitate to contact us.