Identity thieves are very clever. They not only steal credit cards and drain bank accounts; in 2011, the Internal Revenue Service reported the number of fraudulent tax returns associated with identity theft at 940,000 returns, resulting in $6.5 billion in associated fraudulent refunds – according to J. Russell George, head of the Treasury Inspector General for Tax Administration (TIGTA). It is big business for the thieves and it’s a huge headache for the taxpayers whose identities have been stolen.
Identity theft refers to someone obtaining another person’s personal details, to commit fraud or other crimes. This includes the use of a name and Social Security number not belonging to the fraudster.
This is how it works:
In the case of a fraudulently filed tax return, the thief steals your SSN and files a return that is false and results in a tax refund. The taxes are typically filed early in the season, in order to give the thief the best chance of getting the refund check before you even file your taxes.
Then, when you (as the legitimate taxpayer) file your taxes you will be informed that two returns have been filed under your Social Security number.
From the IRS.gov website, receiving one of the following notices, or letters, can be an indication that you are the victim of identity theft:
• More than one tax return was filed for you,
• 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.
They recommend that if you receive a notice of one of these, the best thing to do is to respond immediately. Or if you believe someone may have obtained and used your SSN for fraudulent activity, to report that as well.
Once you or your representative contacts the IRS, you will be required to complete the IRS Identity Theft Affidavit Form. You will be assigned a specialized PIN number to access your tax information and identify yourself with the IRS while you work to prove that you are the legitimate owner of the Social Security number – and not the thief.
If your identity is stolen and taxes filed fraudulently, the bad news is two-fold: the process to clear your name and any penalties or interest can take up to a year, and it is your responsibility to prove that you are the rightful “owner” of the Social Security number stolen.
The good news, if there can be any in this scenario, is that the IRS is taking this activity seriously. They have a screening process in place to try to crack down on fraud; and in the event something does happen, there is a procedure for working with them to prove your identity. It can be a long road and one that you may want help with.
Tips to minimize your risk of tax identity theft:
• Keep your SSN in a safe place, not in your wallet or purse.
• Don’t carry around documents with your SSN on them.
• Don’t give a business your SSN just because they ask. Give it only when required.
• Protect your personal information, including financial details.
• Keep an eye on your credit report, check it every 12 months.
• Be sure to secure the personal information or papers you keep at home – in a locked filing cabinet or safe.
• Keep your computer’s anti-virus software and firewalls up to date. It’s even a good idea to put your information on an external hard drive to protect it in the event your computer is compromised.
• Personal information should not be given unless you initiated the contact or are absolutely sure of who you are dealing with. Scams happen most frequently over the phone, through the mail or on the Internet, so beware.
• It is important to know that the IRS does not initiate contact with taxpayers by email or any type of electronic communication to request personal or financial information.
If you’ve had a lost or stolen wallet or purse, or unexplained activity on your credit report or credit cards, you may want to contact the IRS Identity Protection Specialized Unit at 1-800-908-4490 to protect yourself. The IRS.gov website is updated frequently to keep you informed on the latest scams and how to deal with them.
We assist taxpayers with any and all IRS issues, including clearing fraudulent tax returns filed under your Social Security number. We have the experience and expertise to help you navigate the system and ensure fair treatment by the IRS.
Our firm has an “A+” rating with the Better Business Bureau and all cases are personally handled by the principle of the firm, Mike Habib (EA). Mike is an IRS licensed enrolled agent (EA) and can help you Get Tax Relief & IRS Debt Relief by solving your IRS problems.
To discuss your situation, please contact our tax firm for a free tax consultation at 1-877-78-TAXES.