What to do if you are a victim of Tax Related Identity TheftSep 15, 2016
It seems like the daily news cycle is inundated with security hacks, data breaches and identity thefts. These electronic breaches are resulting in more individuals becoming victims of tax related identity theft. According to the IRS website, “tax related identity theft occurs when someone uses your social security number to file a tax return claiming a fraudulent refund.”
Not all security and data breaches results in tax related identity theft. The following breaches, though serious in nature, will not impact your tax return: credit cards, driver’s license, financial data and health records without your social security number. Any data breach involving your social security number and W-2 can easily be converted into a fraudulent tax return.
As tax preparers, the two scenarios we typically encounter when client information has been comprised are,
1: Correspondence from the IRS identifying a suspicious return using your social security number.
2: When we elect to e-file the return upon completion a rejection error of duplicate return already filed with the Internal Revenue Service is generated.
When these scenarios occur, we advise that you paper file your return attaching IRS Form 14039 (Identity Theft Affidavit). Upon receiving your return the IRS Identity Theft Victim Assistance will notify you in writing, investigate your case, make any necessary adjustments and send you correspondence once resolved.
To protect your tax information going forward the IRS may issue you an Identity Protection Personal Identification Number (IP PIN). The IP PIN is an additional verification step; it is a six digit PIN, issued annually and must be entered on your e-filed tax return in order to be accepted by the IRS.
Here are some additional steps to minimize the risk of becoming a victim of tax related ID theft:
1: Safeguard all documents with your social security number.
2: Do not download links or attachments from unknown websites or emails.
3: Avoid phishing emails and calls. The IRS will never “cold call” you requesting vital information or demanding payment over the phone.
4: Use strong passwords, not “Password”, “123456” or “ABCDEF”. Antivirus and firewall security software are also advisable protections for your personal and business computers.
If you are a victim of Tax Related Identity Theft or require assistance with Form 14039, please contact us and we will gladly assist you through the process.