Have you received an email stating that you have filed a tax return electronically or that your tax return has been accepted or rejected by the I.R.S., but you know you have not filed this tax return? If yes, then it means someone filed your returns with your details; or the SSN entered was in error, but it matched yours, or you may have been the victim of identity theft and tax evasion when someone intentionally filed a tax return with your information. Or did the I.R.S. sent you a letter 5701C or 5747C?
If any of the above conditions are true, it does not mean that you have committed fraud. Someone has probably used your tax information, intentionally or by mistake. We are committed to enlightening you so as to protect your data and promote awareness of identity theft practices.
See the sections below for information on how identity thieves target people, what you can do to protect yourself against identity theft, and how to report identity theft to the I.R.S. and/or state tax agencies.
The return was rejected due to a duplicate SSN.
If you are a confirmed victim of tax identity theft due to a duplicate or previously completed return with your SSN, complete and file Form 14039 if your return was rejected due to a Duplicate SSN. Keep in mind that a return already registered with your SSN could also be the result of an honest mistake by another taxpayer, not necessarily the result of intentional identity theft.
If this is the case, complete and follow the instruction to file Form 14039.
The I.R.S. will investigate your case, and once the fraudulent tax return is removed from your I.R.S. account, you will receive an IP-Pin in the mail at the start of the calendar year or next tax season.
As a victim of confirmed identity theft, you cannot opt-out of the IP-PIN program, unlike other taxpayers. IP-PINs will be sent annually to confirmed victims and participants registered before 2019.
Lost IP-PIN can also be recovered via the online account.
What is Identity Theft?
This is the fraudulent use of an individual's personally identifiable information to commit fraud for profit. Identity thieves look for ways to collect personal information from unsuspecting people to commit fraud while victims are unaware of the act.
Between 2015 and 2019, the I.R.S. protected a total of $ 26 billion in fraudulent refunds by blocking confirmed identity theft returns.
Between 2015 and 2019, the estimate of taxpayers who reported being victims of identity theft decreased by 80%. In 2019, the I.R.S. received 137,000 taxpayer complaints, up from 677,000 in 2015.
Identity theft has increased by 33% in recent years, according to the Department of Justice. The good news is that the I.R.S.'s Criminal Investigations Division has helped convict approximately 2,000 identity thieves. They also have over 1,700 open investigations.
In 2019, approximately 20% of all identity theft reports and fraud were related to identity theft, representing just over 650,000 cases in over 3.2 million reports.
In 2020, the I.R.S. launched the Identity Theft Central, which will improve online access to identity theft information and data security protection for tax professionals, taxpayers, and businesses.
You may be a victim of identity theft if you receive a notification or letter from the I.R.S. attesting to one or more of the following:
Several tax returns were filed using your SSN,
You have a refund offset, additional tax, or have had collection action taken against you in a year in which you have not filed a tax return and/or
I.R.S. records show that you received a salary from an employer for whom you did not work for.
If you are the victim of identity theft and a fraudulent tax return has been filed with your social security number or that of a dependent, you can request a copy of the fraudulent tax return. You will then receive a transcript of a redacted tax return of the fraudulent tax return filed with your SSN. Complete Form 4506-F for a copy of the fraudulent tax return.
How are identities stolen?
Identity thieves use various methods to obtain personal information in malicious ways. One of the most common methods used to obtain electronic information is "phishing." Phishing is a procedure used by identity thieves to collect private and personal information by sending bogus electronic communications from a seemingly legitimate source. This can take the form of email communications or phone calls from a financial institution, such as a bank or government agency.
In general, financial institutions and government agencies do not request personal information, such as a social security number or password, through email and over the phone. For example, suppose the I.R.S. wants more information on a tax return you have filed. In that case, it will usually mail you a letter, which includes information on contacting them if you have questions about the notification.
If a person responds to a phishing email or provides personal information to a caller posing as the I.R.S., they are likely sending the keys to commit fraud to potential thieves.
Protect yourself against identity theft
There are steps you can use to prevent the theft or fraudulent use of your identity. Request an IP P.I.N. or an identity protection P.I.N.
Prevent phishing
Beware of emails and/or phone calls asking for your personal information (important: the I.R.S. will never email you or ask you for a tax return; it will send you an email notification first)
Check credit card and bank statements for any unusual activity.
Contact your financial institution or agency to determine the legitimacy of the email or phone call.
Examine emails to see where they came from. Make sure the sender is someone you know or a newsletter you have subscribed to
Never share personal or confidential information with an unconfirmed source. Protect your data by keeping it where only you can see it.
Use firewall security software and virus protection. Make sure the software is always on and allow automatic updates.
Prevention of tax fraud
Follow the steps above to avoid phishing.
Be aware of irregular practices, such as keeping two books and using a deceased's social security number.
Check and revise your books for irregularities
Choose e-filing or filing partner carefully
Make sure your tax information is protected. If they are electronic, encrypt them with strong passwords.
Monitor all communications received from the I.R.S. or tax agencies.
Report Identity Theft to the I.R.S.
If you believe you have been a victim of identity theft, follow the steps below to report I.R.S. tax fraud:
Go to the Central Identity Theft section of the I.R.S.
Call the I.R.S. Identity Protection Unit at 1-800-908-4490 for assistance.
Complete Form 14039, Identity Theft Report, to prove that you are the true taxpayer (or on behalf of a deceased spouse or relative whose personal information was used to complete a fraudulent tax return).
If you are a victim of identity theft and the theft affects your tax record, check box 1 in section A. However, if your identity has been compromised but has not been used in a fraudulent tax return, check box 2 in section A (You can also check this box if your personal effects or social security cards have been stolen.)
Send Form 14039 to this address: Internal Revenue Service, Stop C2003, Fresno, CA 93888.
You may need to submit a police report and a complaint to the Federal Trade Commission on their website if you are the victim of tax fraud.
Important: If you filed your tax return electronically and the I.R.S. rejected it because your SSN was misused, you will need to file your tax return on paper. Attach Form 14039 and other documents to your paper return and mail it to the I.R.S. address provided in step 3.
Report tax fraud to local state agencies
Each state usually has a phone line or address where a person can file a complaint, if not both. To report tax fraud, call a tax hotline or contact the tax office at the address provided. Some states require you to complete a form to submit it. As of 2020, many states allow you to report tax fraud online.
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