The IRS reports over 700,000 accounts were accessed for ID theft. Tax-related identity theft is the most common identity theft according to the Federal Trade Commission. Warning: Identity thieves attack when clients file tax returns; so don’t put them in the outgoing mailbox. Don’t provide a social security number unless absolutely required. Just because the utility company asks for the social security number doesn’t mean they have a right to it. Most accept driver’s licenses.
CPAs whose clients receive IRS letters 4464C, 5071C, 4883C or Notice CP01B are being alerted by the IRS that a fraudulent return may be filed on their behalf. The IRS is requesting verification of their identities. Remember the IRS does not use email. Clients may also receive IRS letter 4491C informing them someone is using their social security number to obtain employment.
Have the client fax or bring the letter to your office to verify its authenticity before responding to the IRS. If you can’t reach the IRS at the number given in the letter from the IRS, victims can call the ID Protection Specialized Unit at (800) 908-4490.
The first place to go when your ID is stolen is to the police. The next place is the Federal Trade Commission to file a report. Next visit IdentityTheft.gov. where client’s provide a police report and the report number.
Alert one of the three major credit ratings agencies (Equifax, Experian and TransUnion) to place a credit or security freeze on your report to make it difficult for ID thieves to open accounts. File an extended fraud alert in order to obtain two free reports a year for seven years.
Victims may need to file a Form 14039, Identity Theft Affidavit. The form is for one taxpayer at a time. Married couples need to file form 14039 for each spouse. This year, for the first time, victims of tax-related ID theft are able to request a redacted copy of the fraudulent return (provided the victim’s name and Social Security number is listed as the primary or secondary taxpayer). Instructions are available on IRS.gov.
If the victim can’t get any satisfaction from the IRS, they can try reaching out to the Taxpayer Advocate Service, either at the nearest TAS office or by calling (877) 777-4778.