February 22, 2017
The rate of tax related identity theft crimes has significantly increased over the past several years. Below are answers to several common questions regarding tax related identity theft and how it affects individuals.
What is identity theft and how does it affect my taxes?
This is when someone uses your social security number and files a fraudulent tax return to generate a refund. This is typically done early on during the tax filing season. You will not be able to E-file your tax return because the IRS will determine your legitimate return as a duplicate filing under the same social security number. Any tax refund will be delayed.
What is the IRS doing to protect me from becoming a victim?
The IRS is comparing W-2s to the employer W-3s filed with the Social Security Administration to make sure that the information matches up. If it does not match or other information appears to be missing then you will receive one of the two following notices:
- LTR12C: This states that the IRS has received your December 31, 2016 Form 1040 or Form 1040EZ federal individual income tax return, but that more information is needed.
- LTR4883C: This states that the IRS has received your federal income tax return, Form 1040, for the tax year specified on the form, and that it includes your name and social security number. The letter indicates that to protect you from identify theft, they need to verify your identify before the return is processed.
If the IRS does not detect it, how will I know I am a victim?
You will not know this is an issue until you attempt to file your own tax return and find that your return is rejected due to a duplicate filing.
Other ways you may find out:
- You owe additional tax, have had a 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 wages from an employer unknown to you.
What can I do to protect myself from becoming a victim?
There are many ways scammers attempt to retrieve your personal information. The ways to help keep your information safe is:
- Do not respond to emails or mail that look suspicious.
- Do not respond to emails from the IRS. They will always contact you by mail first.
- Never give your information over the phone unless you have initiated the call and you have verified the party whom you are speaking.
- Keep all personal documents containing social security numbers safe and never carry them with you.
- Obtain an identity protection PIN from the IRS to prevent others from e-filing a tax return under your social security number.
- Check your credit reports annually.
- Do not email personal documents or information unless they are secured.
I am a victim, what do I do now?
The IRS has compiled a list of actions you can take if you find you are a victim.
- Call the IRS and inform them that you believe you are a victim as soon as possible at the IRS Identity Protection Specialized Unit at 1-800-908-4490. They will place an identity theft indicator on your account.
- File Form 14039, IRS Identity Theft Affidavit to explain to the IRS your particular situation and how you have become aware.
- Contact one of the three credit bureaus to place a fraud alert on your credit file.
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- Review your credit report for any activity you cannot explain.
- File a police report with your local station for identity theft or with their cyber-crimes unit.
- File a complaint with the Federal Trade Commission online at https://www.identitytheft.gov/ or by phone at 1-877-438-4338.
- Request a redacted copy of the fraudulent return by filing Form 4506-F, Request for Copy of Fraudulent Tax Return, with the IRS. You can acquire the form by visiting www.irs.gov/form4506f.