After spending hours doing battle with piles of paperwork, you have finally compiled and organized them. You put them in a folder and drive to your favorite tax preparer. They complete your tax return and electronically file it with the IRS. So far it’s all as it has been in the past. It’s when they call you the next day to tell you that the IRS has not accepted your return because your Social Security number has already been used to file another return, that your world tilts. You realize this isn’t a joke. No matter how hard you try to reset the situation, nothing changes. Someone else has filed a tax return using your social security number!
You attempt to file your return online and although in past years everything was fine, but for some reason this year, it just doesn’t work. Yes, it could be a technical glitch, but it also could mean that someone has already filed using your social.
First, you will not be able to file electronically. Your return must go by mail. Accompanying your return should be an Identity Theft Affidavit or form 14039. This sets in motion an investigation into your tax return. This is not an audit, but a process to verify your identity. Once the IRS has established that you have been a victim, they will process your return. This can take 6 months to a year. For the foreseeable future it will be necessary for you to contact the IRS just prior to filing your returns to get a PIN number from them to put on your tax return. You will be able to file electronically, but not without that PIN and it changes every year. If you are owed a refund, your life of filing and getting a quick refund are over. At least for now. Until the IRS develops a more efficient way to verify that you are the right person for the refund, you will need patience.
According to GAO 15-119, in 2013 the IRS estimates it paid out 5.8 billion dollars in fraudulent tax refunds. Yes, that is with a “b.” The IRS is continually working to improve this number, but many thieves are still successful.
Is there anything you can do to prevent this happening to you? As it stands right now, cybersecurity people are advising us that there is no way to prevent identity theft. If you have ever gone to school, been admitted to a hospital, bought a car, gotten a loan, or gone to the DMV for a license, just to name a few, your social security number and birth date are out there. It’s only been in the last five to seven years that we have gotten more protective of giving out our personal information and as most of us know many databases go back much farther than that.
The IRS has made tax related identity theft issues a top priority for 2016. Making it a top priority does not mean solving the problem. However, the numbers are improving. In 2014 the number of sentenced individuals for tax fraud was up 75% with a conviction that was up as well.
- Know that the IRS will NEVER call, email or text you. If they want to communicate with you, it will be by mail. If someone calls you (unless you’ve set it up with one of their agents) hang up or delete the email/text.
- If you aren’t sure if a letter is legitimate, call the IRS at 1-800-829-1040 and find out.
- If it definitely looks like a scam letter or you get a call, notify the Treasury Inspector General for Tax Administration at 1-800-366-4484.
- Continue to be vigilant with your information. You can’t take back what you’ve given out in the past, but you can be more protective going forward.
Because of the large volume of tax-refund dollars given out each year, now is the time when tax scam experts materialize. It’s relatively easy for them and is less risky than other crimes. In fact, they file fraudulent tax returns before many employers mail out W-2s. Know these scammers are out there and know that they can be very good at what they do. Even the savviest individual can be duped. Keep your antenna up and call the numbers above if anything looks or feels suspicious.
Lori Lawson is a LegalShield Director and is an ID Shield specialist. Her company, New Line Associates is located at 2111 El Camino Real here in Oceanside and she has been a Chamber member for over ten years. Visit their website at newlineassociates.com. Email her at email@example.com for a free, no obligation fifteen-minute consultation.