Just Now Finding Out Your Tax Return Was Stolen?

Posted May 1, 2018 6:05 pm & filed under Articles
Just Now Finding Out Your Tax Return Was Stolen?

Now that U.S. taxpayers can take advantage of innovations like online tax return filing and DIY tax prep software, more consumers than ever before are waiting until the last minute to file. It’s easier to procrastinate when consumers submit an electronic return versus filing lengthy paper forms.

Identity thieves and scammers have long relied on filing fraudulent tax returns to make a quick buck. But just because the mid-April standard deadline has passed, that doesn’t mean you’re out of the woods as far as tax return fraud goes. If you’re one of the estimated 29 million Americans who waited until the last minute (or even filed for an extension), you still need to be vigilant about ensuring your return is processed properly.

For years, experts have urged taxpayers to file as early as possible in order to beat a scammer to it. If you recently filed, you might not know if someone already filed a tax return in your name.

Of tax identity theft cases reported to the Identity Theft Resource Center in 2017, 32.6% of victims identifying their cases as government identity theft were related to federal tax filings. As a note, most victims of tax identity theft report the incidents directly to the IRS.

This might sound like a crime that only affects a tiny portion of the public, but the Identity Theft Resource Center’s Aftermath report tells a different story. Victims that contacted the ITRC for help resolving their identity theft cases mentioned numerous ways that the crime impacted them negatively, including financial, emotional and even physical repercussions, including:

  • Financial Effects: 38% of respondents indicated they were either unable to obtain credit cards or were denied a credit card due to their identity theft incident, which is up 6.4% over last year’s figures.
  • Lost Opportunity Costs: In dealing with their identity theft case, nearly one-third of respondents indicated they spent time away from other life experiences, like hobbies or a vacation, with more than 25% indicating they had to borrow money from family or friends.

So what do you do if you learn in the coming weeks that your return was filed fraudulently? There’s good news and bad news. The good news is that the IRS is well aware that this crime happens routinely. The bad news is two-fold:

First, your genuine refund will be delayed while the matter is resolved.

Next, you’ll need to clean-up the damage caused by this crime and can expect to take the following steps:

  1. File Form 14039, which is available from IRS.gov. The form can be filled out online then printed and mailed, or you can opt to fill it out and submit it over the internet.
  2. Contact the Federal IRS Identity Protection Specialized Unit, toll-free at 1-800-908-4490. In most cases they will ask you to send:
    • A hard copy of your correct tax return along with all corresponding tax documents (W2s, etc.)
    • An IRS Identity Theft affidavit Form 14039 . Which can be created and filed at the FTC’s website at identitytheft.gov Make sure you get it notarized.
    • A copy of your state ID or driver’s license
  3. Mail all the information in Step 2 via Certified Mail with Return Receipt to the address listed on Form 14039 unless told otherwise by the IRS. It can take the IRS 2-18 months to review and make a determination about your case once they receive your documents. Please be patient.
    • Contact the IRS Taxpayer Advocate Service – (877) 777-4778. If you have an unresolved issue related to identity theft, or you have suffered, or are about to suffer a significant hardship such as wage garnishment or you have had your tax return taken due to unpaid fraudulent taxes. Advocates are familiar with the administration of the tax laws.
    • Speak with the IRS about enrolling in the IPPIN program for the future so that only you have the ability to file a tax return for your information. https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin
  4. Your thief may have also applied for lines of credit using your stolen social security number. Check your credit reports with the three Credit Reporting Agencies. Consider placing a 90-day fraud alert for protection.

Should you need further assistance, you can contact the Identity Theft Resources Center at no-cost through their toll-free call center 888-400-5530 to speak one-on-one with an advisor. If you have the financial means, consider purchasing an identity theft protection service from a reputable provider who can help you during this process and further strengthen your protection. Leading identity protection providers offer services that can sometimes cut through the red-tape, or even full-service resolution services, as well as having access to resources that may not be available without significant time and effort on your part.

Additionally, those eligible for an October filing due to an extension or other circumstance, should remember that scammers may attempt to file tax returns throughout the year, hoping to land on someone who has yet to file. In any situation where you find out that your income tax filing may have been fraudulently filed, use the steps above to get the process started with the IRS. Remember that filing early is a great way to thwart identity thieves but when you can’t, having the tools to get the situation resolved will be a tremendous help.

Generali Global Assistance proudly provides financial support to the Identity Theft Resource Center.