Receive Copies of Fraudulent Tax Returns – What did thieves try to steal?

Receive Copies of Fraudulent Tax Returns – What did thieves try to steal?

Taxpayers who are IRS identity thief victims have been long frustrated by their inability to see what thieves have filed under their Social Security Number. In a recent announcement, the IRS is now allowing taxpayers to obtain copies of these fraudulently filed tax returns

Along with tax season comes the season of tax identification theft. Those who have become victims know how frustrating the experience can be.

The frustration

Until now, if you were a victim of tax identity theft, you would be unable to receive information from the IRS about the depth of the fraud. Many frustrated taxpayers have tried to get copies of the fraudulently filed tax returns. The IRS has repeatedly refused freedom of information requests to get these copies.

What’s new?

In a recent announcement, the IRS has changed course on requests to get copies of fraudulently filed tax returns. As long as you follow their instructions, you are now able to get copies of what thieves attempted to do with your tax information. But be forewarned. The IRS may black out information on the requested return that does not pertain to you. They will try to present you with enough of the falsely filed tax return to allow you to determine the depth of the data that has been stolen.

Why the theft information may be important

  • You can see what personal information the thieves have. What has been compromised? Name, address, and Social Security Number? Do they have your dependent’s or spouse’s information? Perhaps they also have your income and withholding data. Knowing this will help you plan the extent of data protection you will need.
  • There may be clues as to where the identity theft occurred. Of the information stolen, who had access to it? Did the data breach of your identity happen through the IRS or somewhere else?
  • There may be more tax years impacted than you thought. Request information from the year you first became aware of the identity theft at the IRS. But you may wish to request information in a prior year and in the year following the theft. The IRS has access to up to six years of tax returns. Try to determine whether the theft is ongoing is a one-time occurrence.

The request requires specific information. Here is a link to the IRS announcement: Instructions for Requesting Copy of Fraudulent Returns

Thankfully, the IRS’ recent decision to share this fraudulent information is allowing victims to take some action to protect themselves.


IRS PIN Announcement: DO NOT THROW OUT Identity theft PINs are for 2015 not 2014

Recent notices sent out by the IRS for victims of identity theft refer to tax year 2014 in error. These one-time use PINs are for the 2015 tax year. Here is what you need to know.

If you are one of the unfortunate victims of IRS identity theft you will need a one-time PIN to file your tax return. Without this numeric identifier your 2015 tax return will be rejected. The IRS issues taxpayer victims this PIN in a written notice.

What has happened

IRS notices that have this one-time PIN are hitting mailboxes of identity theft victims right now. This is notice CP01A. The tax year printed on the notice may be 2014, when the PIN is to be used for your 2015 tax return. This mistake is causing confusion among taxpayers.

What to do

Do not throw out the notice! This PIN is for your 2015 tax return. Without it you cannot file this year’s tax return.

File your tax return. When tax return filing opens on January 19th, you can file your tax return. This PIN must be entered on your tax form to be accepted by the IRS.

The IRS knows of the mistake. They will not be issuing new forms. Here is their announcement on the error:

Double Check the Check

Double Check the Check – An idea to keep your tax life simple

Following these tips when you receive a check from the Federal or State government can save you more head-aches than you can imagine.

Tip: Double check the dollar amount of your refund check before you cash it. Make sure it matches the amount on your tax return.

Tip: If you have a direct deposit of your refund, only deposit it into one account. This makes matching the dollar amount easier to do.

Tip: Never cash a check received from the IRS or State tax departments that you cannot tie back to a specific reason or tax filing.

The reason for caution

  • Wrong amounts usually mean errors. The error could be yours, or the error could be from the IRS. For example, if the IRS mis-applies a quarterly payment or modifies your tax return, they often will send back an amount that does not tie to your filed tax return.
  • No explanation. Often checks received from the government have little to no description to help you figure out what the check is for and why is has changed from the amount you expected.*
  • Owed money can create penalties and interest. Once cashed, the door is open for a future IRS bill with interest and penalties. For example, a small businessman sent in his quarterly payroll filing. The IRS misapplied the funds, determined the account they applied the money to had no tax, and then sent a check back to the taxpayer. The taxpayer cashed the check. Two years later the business received an underpayment notice along with substantial interest and penalties. The service even applied liens on the taxpayer’s bank account.
  • It may mean identity theft or missing forms. A check with an unusual dollar amount could mean the IRS does not have the corresponding tax form on record. It could also mean your taxpayer account has been compromised.

Should you receive a payment that does not make sense to you, please review your tax return and call for assistance. An un-cashed check received in error can often be returned to avoid confusion and hassle when the IRS finally corrects the problem.

*Note: Sometimes the memo line will include interest paid to you from the IRS. This interest will need to be reported on next year’s tax return.

IRS Identity Theft Season Begins Now

IRS Identity Theft Season Begins Now

Be on your guard as the IRS identity theft season starts in late January. Here’s what you need to know.

Each year thieves try to steal billions in Federal Withholdings by stealing your identity. As the IRS focuses more attention on this quickly growing problem, now is the time of year to be extra vigilant.

Early tax filing season is the worst time

Your federal tax account at the IRS has plenty of money in it from all the taxes withheld from your paycheck during the course of the year. Until you file your tax return, the IRS does not know whether you need to pay more in or they need to refund you the excess amounts withheld.

Thieves know this too, and will try to file a fraudulent tax return before you have time to submit your own. By doing this, they can steal some of your withholdings and be long gone by the time you file your own tax return. So what can you do?

  1. File early. The sooner you file your tax return, the less likely a thief will beat you to your refund.
  2. Check your credit reports. See if there is any suspicious activity on your accounts and on your credit reports.
  3. Protect your ID. Be suspicious; never give out your Social Security Number, do not leave your credit card unattended, never give ID information to someone who called you, use the password function on your phone, be aware of strange mail, and shred important documents. Often your best defense to IRS ID theft is to use best practices to protect your information.

The IRS is becoming a better spotter

If the IRS suspects something is wrong with your filed tax return they will send you a notice. If this happens to you:

  • Respond Immediately. Get the direct contact information from the IRS web site and let them know that you have a possible identity theft problem.
  • File an Identity Theft Affidavit (IRS form 14039). This will record your problem with the IRS and they will take extra steps to ensure your account activity is coming from you and not the ID thief.
  • File a police report.
  • Contact the credit bureaus.

Having your identity stolen is one thing. Having your tax withholding stolen and then having to unravel this problem within the IRS is a major hassle. Try to stay vigilant and know that there are steps to help protect your tax records. Is there good news in all this? If the IRS pays out a refund to someone stealing your identity, they are on the hook for this loss, not you.