What Occurs When a Fraudulent Tax Return Is Filed?

Everyone knows that we’re supposed to guard our Social Safety numbers (SSNs) in any respect price. Don’t carry your card in your pockets or give the quantity to anybody who doesn’t have a legitimate motive for requesting it. Identification thieves can wreck all types of havoc with that straightforward nine-digit quantity, from taking out loans in your title to, sure, submitting a fraudulent tax return utilizing your id.

Tax-related id theft often happens as a result of somebody is attempting to collect a tax refund you’re entitled to earlier than you file your return and ask for it. Fraudsters are inclined to file instantly, as quickly because the IRS formally opens its doorways to start processing returns for the yr. The thought is to beat you to the punch. The thief could have that refund in hand—or spent—lengthy earlier than you get round to firing up your tax preparation software program.

How Do You Know If You’re a Sufferer?

Taxpayers are sometimes tipped off that returns have already filed utilizing their SSNs after they try and e-file, solely to be told that they’ve already submitted a return. This isn’t one thing you’re more likely to overlook doing, so it’s an actual crimson flag.

However generally the IRS merely picks up on a suspicious oddity in a return filed in your title. That is the best-case situation, as a result of the IRS gained’t ship out any refunds till the matter has been cleared up. The IRS may also catch the issue in case you mail your return the great, old style method rather than e-file, but it surely already has a present tax return on file for you.

The IRS will ship you a discover if it detects an issue, both a “Letter 5071C” or “Letter 4883C,” relying on why a flag popped up. It can ask you to verify your id and inform you how to take action. In any other case, in case your e-filed return was rejected, it is as much as you to let the IRS know.

What to Do? File Type 14039

You’ll need to file a paper return in case you tried to e-file solely to have your return rejected as a result of the IRS already has one beneath your SSN. Embody IRS Type 14039, the Identification Theft Affidavit, together with your return.

Don’t submit the shape except your e-filed return was rejected otherwise you obtained discover from the IRS telling you to take action—a type of 5071C or 4883C letters.

You’ll be able to full Type 14039 on-line, then print it out and mail it together with a replica of your Social Safety card and your driver’s license, army ID, or U.S. passport. One other ID card issued by a authorities entity is appropriate as nicely. Given the character of the issue, you may need to do that by licensed mail, return receipt requested, so that you’re certain this info hasn’t by some means fallen into the improper fingers.

In the event you’re responding to a letter from the IRS, it ought to inform you the place to mail all these paperwork. In any other case, in case your e-filed return was rejected, ship the Type 14039 and different paperwork to the IRS at P.O. Field 9039, Andover, MA 01810-0939.

You’ll be able to contact the Taxpayer Safety Program at 800-908-4490 when you have any questions or want steerage. The IRS has carried out this program to assist taxpayers with id theft conditions.

Affirm Your Identification

The IRS discover may additionally ask you to verify your id. You are able to do this on-line on the Identification Verification Service provided by the IRS.

Be sure you have a previous yr’s tax return at your fingertips as a result of, in any case, the thing is to make sure that you actually are who you say you’re. You’ll want info from that return as a way to verify this. You may even be requested in your date of start and SSN.

What Occurs Subsequent? 

The IRS will acknowledge receipt of your Type 14039 in case you despatched one, and it’ll flip the matter over to its Identification Theft Sufferer Help Program (IDTVA) to analyze the matter. You need to obtain notification that this has been performed, then of the eventual consequence in about six months.

In any other case, in case you’ve been requested to verify your id, you may then inform the IRS that you just didn’t file the iffy return in query. The suitable quantity to name ought to seem in your discover. They’ll pluck the return out of their system—no refund can be despatched to the id thief.

The IRS may also tag you in its system as an id theft sufferer or potential sufferer. That is supposed to divert different comparable assaults sooner or later.

Lastly, you’ll hear from the IRS one final time in any case is claimed and performed and the state of affairs has been rectified. You’ll be provided the chance to enroll in a Federal Identification Safety PIN or “IP PIN.” In the event you settle for, you’ll use these six numbers to establish your self while you e-file future tax returns.

In the event you determine you don’t need an IP PIN, you’ll need to submit paper tax returns for the remainder of your life. Though you’ll be issued new digits yearly, you need to use the pin to e-file all of your future returns.

Shield Your self In opposition to Additional Scams 

Do not forget that the IRS will by no means electronic mail you or name you about an issue except you’ve already been in contact with them about a problem. Delete any suspicious emails unopened. Don’t reply your telephone or return any calls with an IRS caller ID in case you’re not anticipating communication from them.

Report on-line and electronic mail incidents to the IRS at phishing@irs.gov. Name 800-366-4484 for different varieties of contact, resembling by telephone.

Don’t neglect to verify together with your state’s income division as nicely in case you’re a sufferer of federal tax ID fraud. It’s potential that the thief didn’t cease together with your federal tax id.

Let your native police know what’s occurred in case you’ve been focused as a sufferer. Make it a matter of official public document. And remember the fact that if a thief has your SSN, he won’t cease at utilizing it to file a fraudulent tax return. Attain out to your monetary establishments, the “massive three” credit score reporting businesses, and the Federal Commerce Fee as nicely.

You’ll be able to attain the credit score businesses both on-line or by telephone at:

  • Equifax: Equifax.com, 800-525-6285
  • Experian: Experian.com, 888-397-3742
  • TransUnion: TransUnion.com, 800-680-7289