During the 2014 tax filing season, the IRS suspected and stopped more than 3.6 million returns filed by identity thieves, according to the agency’s Taxpayer Advocate Service. If you’re a victim of tax-related identity theft, work with the IRS to remove fraudulent, inaccurate information from your account and ensure your actual return is processed correctly. Here’s how to do just that.
A couple of crimes
Tax-related identity theft can occur in many ways. First, a thief may steal someone’s Social Security number (SSN), file a tax return and fraudulently claim a refund. Many thefts occur early in the filing season, so the rightful holders of the SSNs aren’t aware of the crime until they file their own, legitimate returns.
A second approach is for the identity thief to use another person’s SSN to apply for a job. After the perpetrator starts work, the employer will likely report his or her wages to the IRS using the stolen SSN. The rightful owner of the SSN won’t know about this until he or she receives a notice from the IRS — for neglecting to report wages.
Paths to recovery
If you receive an IRS notice stating that more than one return was filed under your SSN, call the number provided. You’ll likely need to complete Form 14039, “Identity Theft Affidavit.” This form is for victims of identity theft, as well as those whose identity has been compromised in a way that could impact future tax returns — for example, having one’s wallet stolen. If you don’t receive a notice but believe you’ve been victimized or are at risk for identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490.
Also, depending on where you live, you may receive a “CP01F Notice.” It allows some identity theft victims to obtain unique six-digit numbers, called “IP PINs,” that help prevent misuse of their SSNs on federal tax returns and show that the taxpayers are the rightful filers. (As of this writing, in addition to those taxpayers notified by the IRS, the IP PIN program is available to all taxpayers in Florida, Georgia and Washington D.C., as these areas have high per-capita rates of tax-related identity theft, according to the IRS.)
Above all, continue to pay your taxes and file your return — even if you must do so on paper.
And remember that the IRS will never ask for personal or financial information via electronic communication, such as email, text messages or social media.
Recovering from tax-related identity theft can be time-consuming and frustrating. Just know that help is available via IRS processes and your tax advisor.