Article Highlights:
- Tax-related Identity Theft
- Immediate Steps for Taxpayers
- Report the Incident to the IRS
- Contact Other Agencies
- Secure Your Personal Information
- Stay Vigilant
- How the IRS Protects Taxpayers
- Special Number for Filing Tax Returns
- Obtaining an Identity Protection PIN (IP PIN)
In an era where digital transactions and online interactions are the norm, the threat of identity theft looms large, offering major hurdles and financial risks for individuals. Among the different types of identity theft, tax-related identity theft is most pernicious. It happens when someone steals your personal information, including your Social Security Number (SSN), and files a tax return in your name to claim a bogus refund. This not only jeopardizes your financial health but also complicates your tax duties to the Internal Revenue Service (IRS). Understanding the actions to follow after identity theft, as well as the safeguards put in place by the IRS to protect taxpayers, can assist to limit the effect and restore your financial integrity.
Signs of Tax-Related ID Theft
According to the IRS, any of the following tax-related issues could indicate that your ID has been compromised:
- You get a letter from the IRS inquiring about a suspicious tax return that you did not file.
- You can't e-file your tax return because of a duplicate Social Security number. In this case you should file a paper tax return along with a Form 14039, Identity Theft Affidavit.
- You get a tax transcript in the mail that you did not request.
- You get an IRS notice that an online account has been created in your name.
- You get an IRS notice that your existing online account has been accessed or disabled when you took no action.
- You get an IRS notice that you owe additional tax or refund offset, or that you have had collection actions taken against you for a year you did not file a tax return.
- IRS records indicate you received wages or other income from an employer you didn't work for.
- You've been assigned an Employer Identification Number, but you did not request an EIN.
Immediate Steps for Taxpayers
Report the Incident - If you believe or know that your identity has been stolen, contact the IRS immediately. You can do this by filling out Form 14039, Identity Theft Affidavit, which notifies the IRS of the suspected fraud. This step is crucial, as it alerts the IRS to scrutinize any tax return filed under your SSN more carefully. Form 14039 can be completed and submitted online at f14039.pdf (irs.gov), faxed or mailed to the IRS.
Contact Other Agencies – Aside from the IRS, you should report the identity theft to the Federal Trade Commission (FTC) at IdentityTheft.gov, which serves as a central reporting point for identity theft and provides recovery assistance. Furthermore, notifying the Social Security Administration and the main credit agencies (Equifax, Experian, and TransUnion) might assist prevent future abuse of your personal information.
Protect Your Personal Information - Change the passwords for your internet accounts, particularly those relating to financial institutions and email. Make sure your computer has up-to-date antivirus software, and consider placing a credit freeze or fraud alert on your credit reports to prevent new accounts from being started in your name.
Stay vigilant - Regularly check your bank accounts and credit reports for any illegal activities or adjustments. This preventive technique might help you detect any future efforts at identity theft early.
How the IRS Protects Taxpayers
The IRS has increased its efforts to combat tax-related identity theft with a multifaceted approach that emphasizes prevention, detection, and victim aid. The IRS is constantly improving its security procedures to keep identity thieves from filing false tax returns. This involves using powerful data analytics to identify questionable returns and strengthening authentication procedures for online services.
The IRS has nearly 3,000 workers committed to working on identity theft cases, and more than 35,000 staff have been educated to spot and aid victims. The agency utilizes sophisticated return-processing filters to identify potentially fraudulent returns, preventing fraudulent reimbursements from being issued.
Individuals victimized by tax-related identity theft can seek specialist assistance from the IRS's Identity Protection specialist Unit (IPSU). It can provide an Identity Protection PIN (IP PIN), which is a six-digit number that, together with the taxpayer's Social Security number, must be submitted on tax returns to validate their identity.
Initially, the IP PIN was only available to victims of identity theft or those judged at high risk of it. Recognizing the growing concern of identity theft, the IRS extended the program, making it available to any taxpayers who wanted to join and could confirm their identities.
The procedure of acquiring an IP PIN starts with the taxpayer establishing their identification with the IRS. This may be completed online using the IRS's Get an Identity Protection PIN (IP PIN) service, which is a secure platform built specifically for this purpose. However, the procedure is rigorous, showing the IRS's sensitivity about the protection of taxpayer information. If you are unable to authenticate your identification online, you can submit IRS Form 15227 (for individuals with an adjusted gross income of $72,000 or less) or schedule an in-person appointment at an IRS Taxpayer Assistance Center.
Once a taxpayer has an IP PIN, it becomes an integral element of the tax filing process. The IP PIN must be provided on federal tax returns as a unique identifier that allows the IRS to authenticate the taxpayer's identification. This stops identity thieves from submitting fake tax returns with the taxpayer's Social Security number. It's worth noting that the IP PIN is only good for one calendar year and must be updated yearly. Each year, the IRS issues a new IP PIN for program participants, which they may get using the same secure IRS online facility or by waiting for a postal notification.
The IP PIN is extremely important to victims of identity theft. For people who have had their Social Security number used for tax fraud, the IP PIN serves as a protection for future tax returns. It assures that even if their personal information is hacked again, the IP PIN will keep fraudulent returns from being submitted in their name. This not only protects the taxpayer's return, but also contributes to the overall battle against tax-related identity theft.
The road to recovery after identity theft can be difficult, but taking decisive action and utilizing available tools can greatly simplify the process. Taxpayers may reduce the effect of identity theft by reporting it to the IRS and other relevant agencies as soon as possible, protecting personal information, and being cautious.
Please contact this office for assistance in dealing with the IRS in the event of identity theft.
