Robin Bell, Partner, Tax Services, discusses the signs of tax filing identity fraud, how to prevent it and what a victim of tax fraud can do.

1. It’s something that you’d least
expect to happen when preparing
to pay Uncle Sam. Unfortunately,
this year, many people discovered while
trying to file that someone else had
fraudulently used their social security
number to file a false tax return.
Tax Refund Fraud is on the rise this tax filing
season. According to the Treasury Inspector
General for Tax Administration, as of March
6, 2014, the IRS had identified more than
57,000 returns with $385 million claimed
in fraudulent refunds. The IRS prevented
issuance of $336 million of those funds. So,
even with stepped-up prevention methods,
criminals are still getting away with your
hard-earned money.
Signs of tax filing identity fraud
The IRS says you may be a victim if your tax
preparer or the IRS contacts you about one
of these scenarios:
• More than one tax return for you was filed.
• You have a balance due, refund offset or
have had collection actions taken against
you for a year you did not file a tax return.
• IRS records indicate you received more
wages than you actually earned.
• Your state or federal benefits were
reduced or cancelled because the agency
received information reporting an income
change.
It’s important to note that e-filing doesn’t
put you at greater risk for fraud. Paper
filers are just as susceptible to becoming a
victim. The thieves have filed these returns
with success because they’ve been able
to file the fraudulent returns before the
true owners of the social security numbers
have had the chance to file. Paper filers that
mailed returns on the tax deadline may still
get a notice that a return was previously
filed using their social security number.
What can a victim do?
1) Contact the IRS or your tax advisor
immediately.
If you receive a notice from the IRS, call
the number on the notice. If you suspect
that you are a victim of tax filing identity
fraud, you can contact the IRS Identity
Protection Specialized Unit at 1-800-908-
4490, extension 245. This step will allow the
IRS to secure your tax account and match
your social security number or individual
taxpayer identification number (ITIN).
According to the IRS, a typical case will take
about 180 days to resolve.
Your tax advisor can assist you with this
process.
2) Complete IRS Form 14039.
Form 14039 is an Identity Theft Affidavit.
You should fill this form out to officially
notify the IRS that you are an actual or
potential victim of fraud and to verify your
identity.
3) Contact the FTC, credit bureaus and the
local police.
To minimize the damage criminals can
do to your personal credit, contact the
fraud divisions of the Federal Trade
Commission. You should also contact the
fraud departments of the three major credit
bureaus: Equifax, Experian and Transunion.
You can also file a report with the local
police.
4) Review your credit report.
It’s also a good idea to get a copy of your
credit report from the three major bureaus
to identify any fraudulent activity so you
can close any credit accounts that have
been opened in your name.
How can you prevent tax filing identity
fraud?
1) Don’t give personal information
unwittingly.
Be aware of scams where seemingly
authorized individuals try to collect
personal information from you
like your social security and bank
account numbers—especially if this
correspondence comes via e-mail.
2) Check your credit report regularly.
Reviewing your credit report may alert
you to fraudulent activity before too much
damage has been done.
3) Open correspondence from the IRS.
When the IRS contacts you, follow up. Your
identity could be compromised.
4) Purchase identity theft protection.
Consider purchasing an identity theft
monitoring service to keep a watchful eye
on your financial profile 24/7.
Tax Filing Fraud Rampant This Tax Season
Robin Bell, CPA
Partner
Tax Services
rbell@bswllc.com
314.983.1217
© 2014 Brown Smith Wallace
Contact Robin Bell or any of our
tax professionals for a consultation
today: bswllc.com/taxfraud
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