Review of Online IRS Resources for Identity Theft Victims

Over the past few years, I have had many clients who have become victims of tax-related identity theft, which takes a traumatic toll on emotions, finances, and credit scores.  I thus decided to review and summarize the information the IRS has provided online:1. Taxpayer Guide to Identity Theft: Provides information on what is identity theft, how to know if your tax records have been affected, what to do if your tax records were affected by identity theft, how to protect your tax records, and how to minimize the chance of becoming a victim of identity theft.

• What to do if your tax records were affected by identity theft:
  • If you received a notice from the IRS, respond immediately to the name and number printed on the notice.
  • Fill out the IRS Identity Theft Affidavit: Form 14039
  • If you have previously been in contact with the IRS and have not received a resolution, contact the IRS Identity Protection Specialized Unit, toll-free, at 1-800-908-4490

2. Identity Protection

• Provides many resources on identity theft
• Provides link to IRS Videos on Identity Theft:
  • IRS Identity Theft FAQ: Going After the Bad Guys (Video 1):
    • Law Enforcement Assistance Program
      • Obtain Form 8821-A (IRS Disclosure Authorization for Victims of Identity Theft) from local police office.  This is a waiver that allows the IRS to share tax information with local law enforcement so that law enforcement can investigate and prosecute these cases.
      • File police report and ask if that law enforcement agency participates in that program.
  • IRS Identity Theft FAQ: First Steps for Victims (Video 2):
    • If you received a letter from the IRS, respond immediately using contact info you received in your letter.
    • If you haven’t received a letter from the IRS, but still think you are at risk because of something like a lost wallet, fill out the Identity Theft Affidavit (Form 14039) so that the IRS can take steps to further secure your account.  Follow instructions on back of form.
    • Recommends that you:
      • file a police report with your local law enforcement agency and
      • contact the credit bureaus to place a fraud alert on your credit account.
    • Go to www.irs.gov.  Type “identity theft” in the search field.
  • IRS Efforts on Identity Theft (Video 3):
    • Background on IRS’s efforts against IRS identity theft.
    • IRS resolves most identity theft cases in less than 180 days.
  • Protect Yourself from Identity Theft (Video 4):
    • Provides suggestions to protect yourself from identity theft.
    • Notes that the IRS does not send emails out of the blue, especially emails asking for personal or financial information.
    • If you receive an email asking for personal or financial information, let the IRS know, and do not click on any links or respond to that email with any personal information.
  • Are You a Victim of Identity Theft? (Video 5)
    • Provides information for a person who received from the IRS a notice that says that the person already filed a tax return, but they person knows that he/she did not, or that the person received wages from an employer you don’t know.
    • Explains 2 types of identity theft involving tax information: (1) Someone uses your personal information (ex., social security number) to file tax return to get a bogus refund; (2) using your identity to get a job.
    • If you contact the IRS, the IRS can take steps to secure your tax account and match your social security number with the right person.
  • Phishing Malware (Video 6):
    • Advises taxpayers that an unexpected email that says that it is from the IRS is a scam.
    • Clicking a link or downloading an attachment from the email could download malicious software onto your computer.
    • This software could allow the sender to access your passwords, bank information, and other information on your computer, allowing them to steal the taxpayer’s identity or money.
    • Reiterates that the IRS does not initiate contact with taxpayers through email.

3. IRS Page on Phishing4. Taxpayer Advocate Identity Theft Page

• Provides link to video: Protecting Against Identity Theft:
  • ID theft: #1 consumer complaint in the U.S.
  • IRS encounters identity theft when an individual intentionally uses the Social Security number of another person to file a false tax return OR fraudulently obtain employment
  • Possible consequences when tax accounts of identity theft victims are compromised:
    • Delayed or denied refunds;
    • Assessment of tax debt resulting from income reflected on the fraudulent filer’s tax return;
    • Victims may be required to prove their identities to the IRS year after year.
  • IRS may assign victims of identity theft a temporary IRS number called an IRSN to use for filing a tax return while determining the true owner of the compromised SSN.
  • Victims of identity theft should:
    • Report the incident to the Federal Trade Commission (FTC Complaint Asssistant);
    • File a report with the local police and get a copy of that report;
    • Contact the fraud departments of the 3 major credit rating agencies:
      • Equifax: 1-800-525-6285
      • Experian: 1-888-397-3742
      • TransUnion: 1-800-680-7289
    • Close any accounts that have been tampered with or opened5. fraudulently; and
    • report misuse of SSN to the Social Security Administration at 1-800-269-0271.
• Advises taxpayers who have previously been in contact with the IRS and have not achieved a resolution to contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.
• Provides contact info for Taxpayer Advocate Service: 1-877-ASK-TAS1.

5. 2014 Identity Protection PIN (IP PIN) Pilot (January 2014):  For 2014, the IRS offers a limited pilot program to provide taxpayers who filed their tax returns from either Florida, Georgia, or D.C. in 2013 with an extra layer of protection from identity theft

• If these taxpayers obtain an e-file PIN to submit their tax return in 2014, they may be invited to apply for an Identity Protection PIN ("IP PIN").
• Florida, Georgia and D.C. selected because they have the highest per-capita percentage of tax-related ID theft.
• Do not have to be an ID theft victim to take part in this program (IP Pin usage before this program limited to ID theft victims)
• IRS will not issue IP PIN unless the person's identity has been verified via answers to a series of questions to verify identity

6. Direct Deposit Limits (July 1, 2014-release date):

• IRS procedures effective January 2015:
  • Allow up to three refunds electronically deposited in a single financial account or pre-paid debit card
  • Any refunds after the first three refunds will convert automatically to a paper refund check and be mailed to taxpayer.
  • Taxpayers will receive a notice informing them that account exceeds direct deposit limits and that they will receive a paper refund check
  • Taxpayers can track refunds at Where's My Refund?
  • Direct deposits must be made to accounts bearing the taxpayer's name
    • Stops abuse by preparers who obtain payment for tax preparation services by depositing at least part of their client's refunds into the preparers' own bank accounts.
    • Preparer fees cannot be recovered by splitting the refund using Form 8888 or opening joint bank accounts with taxpayers.

 Want to further discuss these issues?  Contact me at 954-944-3929 or nrumbak@rumbaklaw.com.*This document contains legal information, but does not contain legal advice.