Identity Theft & Tax Returns

Identity TheftIdentity theft remains a top priority for the Internal Revenue Service in 2014. Identity theft is one of the fastest growing crimes nationwide, and refund fraud caused by identity theft is one of the biggest challenges facing the IRS. This year, the IRS continues to take new steps and strong actions to protect taxpayers and help victims of identity theft and refund fraud.

Stopping refund fraud related to identity theft is a top priority for the tax agency. The IRS is focused on preventing, detecting and resolving identity theft cases as soon as possible. The IRS has more than 3,000 employees working on identity theft cases. They have also trained employees who work with taxpayers to recognize and provide assistance when identity theft occurs.

Taxpayers can encounter identity theft involving their tax returns in several ways. One instance is where identity thieves try filing fraudulent refund claims using another person’s identifying information, which has been stolen. Innocent taxpayers are victimized because their refunds are delayed.

Here are some tips to protect you from becoming a victim, and steps to take if you think someone may have filed a tax return using your name:

Tips to protect you from becoming a victim of identity theft

  • Don’t carry your Social Security card or any documents that include your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN).
  • Don’t give a business your SSN or ITIN just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls and anti-spam/virus software, updating security patches and changing passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 (Monday – Friday, 7 a.m. – 7 p.m. local time; Alaska and Hawaii follow Pacific time).

canstockphoto15648977What if you find that you are a victim of identity theft?  How do you know when you have become a victim?  Your e-filed return may be rejected when we attempt to file it, or you could receive a notice from the IRS, if:

  • 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;
  • IRS records indicate you received more wages than you actually earned or
  • Your state or federal benefits were reduced or cancelled because the agency received information reporting an income change.

If you receive a notice from the IRS and you suspect your identity has been used fraudulently, respond immediately by calling the number on the notice. (Also, the IRS will never contact you via email.)  If you did not receive an IRS notice but believe you are the victim of identity theft, contact the IRS Identity Protection Specialized Unit at 800-908-4490, extension 245 right away to secure your tax account and match your SSN or ITIN.

Loggins Kern & McCombs can assist you with the filing of the IRS Identity Theft Affidavit, Form 14039.  This form should be filed as soon as possible with required documentation, and a copy of this form will need to be attached to any paper filed return that was earlier rejected for e-filing.

In addition, we recommend you take additional steps with agencies outside the IRS:

  • Report incidents of identity theft to the Federal Trade Commission at www.consumer.ftc.gov or the FTC Identity Theft hotline at 877-438-4338 or TTY 866-653-4261.
  • File a report with the local police.
  • Contact the fraud departments of the three major credit bureaus:
    • Equifax – www.equifax.com, 800-525-6285
    • Experian – www.experian.com, 888-397-3742
    • TransUnion – www.transunion.com, 800-680-7289
  • Close any accounts that have been tampered with or opened fraudulently.

 

Refund Check - Taking out of Envelope

What if you have reported an identity theft case to the IRS and are waiting for your federal tax refund?  The IRS is working to speed up and further streamline identity theft case resolution to help innocent taxpayers.  Although the IRS has more than doubled  the level of employees dedicated to working identity theft cases, it can still take up to 180 days to resolve identity theft issues.

These are extremely complex cases to resolve, frequently touching on multiple issues and multiple tax years. Cases of resolving identity can be complicated by the thieves themselves contacting the IRS. Due to the complexity of the situation, this is a time-consuming process. Taxpayers are likely to see their refunds delayed for an extended period of time while we take the necessary actions to resolve the matter.

If you have an open identity theft case that is being worked by the IRS, you need to continue to file your tax returns during this period.

For victims of identity theft who have previously been in contact with the IRS and have not achieved a resolution to their case, you may contact the IRS Identity Protection Specialized Unit, toll-free, at 800-908-4490. If you are unable to get your issue resolved and are experiencing financial difficulties, contact the Taxpayer Advocate Service toll-free at 877-777-4778.  As always, Loggins Kern & McCombs is available throughout the process to assist in any way we can.

Loggins Kern & McCombs CPAs
770-478-7424

 

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