There are multiple reasons that the IRS would request proof of your identity. M-E Accounting & Tax Services, Inc. can help you gather the correct information and report it to the right channels to resolve any issues that an identity inquiry could cause. Be prepared, however, for the several instances in which the IRS or State of New York may request proof of identity, and what you will need for verification.
Letter 5017C
Due to a large number of false returns being filed through self-preparation software, the IRS is cracking down on identity verification. The IRS has increased their thresholds and systems to detect any suspected identity theft. Slight red flags could result in you receiving a letter 5017C requesting that you verify your identity with the government. They will state that they received a tax return with your name and Social Security number it may not be yours. The letter will lay out the verification process to confirm whether or not the return is actually yours. Then, you will be able to verify your identity via the IRS website or a toll free number, provided within the letter. The website will ask a series of questions that only the real taxpayer can answer. Once the identity is verified, you will need to confirm whether you filed the return. If they did file the return, they may see a delay in the filing and refund process. In order to properly answer the questions, you should have your tax return from the prior year and your current tax return on hand, along with your W-2s, 1099s and Schedules A and C. While this can be a bit of a delay in the normal process, verifying your identity in response to a letter 5017C is relatively simple and can be handled quickly if you have the proper documentation.
If for some reason you answer a question wrong, it can be somewhat difficult to start over. The only way to remedy the issue if you need to start over is to call the toll free number on the original letter and have a live representative assist you, or personally visit the IRS office (there is one on Broadway and another on
Maiden Lane).
Tax Identity Fraud
If you suspect someone of using your identity, you can report this to the IRS. Tax-related identity theft is used to claim a refund that someone is not entitled to. You may think of this as someone filing a return under your name and social security number. This can happen to multiple people at a time on one return. Another common form of tax fraud is when someone will use your name and social security number to claim you as another individual in their household, either as a dependent or a spouse. If you suspect that a fraudulent return has been filed in your name, contact the IRS immediately. If a fraudulent return is e-filed, the e-filing system will not allow you to file your return. In this case, you do not need to wait, just file a paper return along with an Identity Theft Affidavit. This will signal the IRS to investigate your return for identity theft. You will also want to file a form DTF-275 with New York State. New York recommends that you also attach a photo ID and utility bill as proof of address. In most cases, you will receive a protective pin to utilize for the following years. Usually, identity theft tax issues can be resolved within approximately four months.
Income Identity Fraud
There are several ways that your identity could be stolen. In everyday life, someone could find your wallet or personal information. You also want to always ignore email correspondence requesting personal information from the IRS or a government agency. If you have a doubt about the legitimacy of an email requesting information, call your local associated government office (use the number listed on the official site or phone book listing) to confirm. The IRS requests that any emails which state they are from the IRS be forwarded to phishing@irs.gov.
If your social security information is stolen, the possibility arises that someone could use it to receive income through employment. If this happens, there is a possibility that the IRS could believe you didn’t report some of your income, since your return would only report the income you had earned. If the IRS contacts you requesting you claim wages from an employer you don’t know, follow the steps to report identity theft. You should submit a copy of your valid Social Security card, driver’s license, or passport, along with a copy of a police report and an Identity Theft Affidavit.
Proof of Address
There are some circumstances in which the IRS will ask you to verify your address, or the address of your dependents. This happens frequently in split custody situations, or when a large credit based on dependent care or status is received. You can verify your address by submitting utility bills mailed to your physical address in your name. For your dependents, the IRS usually requests a report card or school progress report addressed to their primary residence.
Whether the IRS or State of New York request that you verify your identity, or you wish to report suspicious activity or identity fraud, Lillian’s Professional Services is available to advise you on the best course of action.
M-E Accounting & Tax Services, Inc.