Identity theft occurs when someone uses another’s personal information without their permission to commit fraud or other crimes using the victim’s name, Social Security number or other identifying information. When it comes to federal taxes, taxpayers may not be aware they have become victims of identity theft until they receive a letter from the Internal Revenue Service stating more than one tax return was filed with their information or that IRS records show wages from an employer the taxpayer has not worked for in the past.
The IRS has announced the availability of additional information for taxpayers caught by identity theft as part of a larger, comprehensive identity theft strategy focused on fraud protection and victim assistance.
The IRS has created a special section on IRS.gov dedicated to identity theft matters, including tips for taxpayers and a special guide to assistance ranging from contacting the IRS Identity Protection Specialized Unit to tips to protect against “phishing” schemes. The IRS also is taking a number of additional steps this tax season to prevent identity theft and detect refund fraud before it occurs.
Fighting identity theft will be an ongoing battle, as identity thieves continue to create new ways of stealing personal information and using it for their gain. Identity theft cases are among the most complex handled by the IRS. The IRS is continually reviewing processes and policies to minimize the incidence of identity theft and to help those who find themselves victimized by it.
If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at 800-908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.
Over the past year, the IRS has developed a comprehensive identity theft strategy that is focused on preventing, detecting and resolving identity theft cases as soon as possible. This occurs as the IRS continues to balance delivering tax refunds in the intended timeframe while ensuring that appropriate compliance controls are in place to minimize errors and fraud.
The IRS is taking a number of steps to prevent identity theft, and detect and stop identity theft attempts. This includes designing new identity theft screening filters that will improve the IRS’s ability to spot false returns before they are processed and before a refund is issued, as well as placing identity theft indicators on taxpayer accounts to track and manage identity theft incidents. IRS Criminal Investigation, in partnership with other law enforcement agencies, is also diligent in investigating criminals who perpetrate these crimes.
A pilot program begun in 2010 to mark the accounts of deceased taxpayers to prevent misuse by identity thieves is expanding. The IRS has also expanded an initiative this year to protect victims with previously confirmed cases of identity theft. In late 2011, a group of taxpayers received a special Identity Protection Personal Identification Number, or IP PIN, for use in filing their tax returns for this filing season. The IRS is additionally working to speed up case resolution, provide more training for employees who assist victims of identity theft, and step up outreach to taxpayers.