The IRS and Identity Theft

Admin 1/ September 18, 2015/ Other IRS Issues/ 0 comments

computer-keyboard-1188763-640x480So is the theft of personal information from the IRS really that big of an issue?

Well, if you happen to be one of the 850,000 people in the US who has been affected by an IRS stolen identity during the last several years, according to IRS commissioner John Koskinen, then it would be very important to you.

The IRS and Identity Theft

 

IRS research has revealed that identity thieves who use stolen IRS taxpayer information will normally use the victim’s Social Security Number (SSN) to file personal income tax returns that show that a refund is due. Thieves will use the victim’s name and SSN to claim a fraudulent income tax refund that will be mailed to a bogus address that is controlled by the thief.

Thieves will most often use rented postal boxes and have numerous tax refund checks mailed to the same address but under different names. These enterprising pickpockets will then open dozens of bank accounts with counterfeit driver’s licenses and even student ID cards and Social Security Numbers. Apprehended thieves have disclosed to IRS officials that many banks did not verify the Social Security Numbers that were provided when those bank accounts were opened.

Theft of one’s identity from the IRS computer records is often not discovered by IRS until an alert individual taxpayer contacts IRS representatives to discuss his or her tax matters. Since most American taxpayers would rather face a pit full of rattlesnakes rather than talk to anyone at the IRS it is easy to understand why so few people ever discover that their identity was stolen from IRS itself.

One Hundred Thousand Taxpayers Were Hit

 

Lost paprtdIRS officials recently reported that the agency would notify over 100,000 taxpayers whose personal information and income tax information was stolen, in addition to another 100,000 whose data was unsuccessfully requested by tax thieves. The individuals whose identities were actually stolen will be offered free credit report monitoring that will be provided by the IRS and the additional 100,000 people will receive mailed notices informing them that identity thieves were able to steal their personal information but were unable to access their tax information like wage and bank interest income and self-employed business information.

Individuals who want to learn more about IRS identity theft can refer to IRS Publication 5027, Identity Theft Information for Taxpayers.

Many officials at IRS believe that thieves from Russia and/or China have been behind the computer hack attacks.

What Should You Do if the IRS Loses Your Info?

 

Individuals who discover that their identities have been stolen and used to file false income tax returns and want to discuss the matter with IRS can download IRS Form 14039 and use it to inform IRS about their concerns. The form alerts IRS that a taxpayer’s identity has been stolen and used to file a fraudulent income tax return using the real taxpayer’s identity. This IRS form is used to provide the tax year that has been affected; the form will also require a copy of the previous year’s income tax return.

Form 14039 should be mailed it to the IRS and accompanied with a copy of the identity theft victim’s Social Security card and driver’s license or other official identification. This form can be mailed to:

Internal Revenue Service

P.O. Box 9039

Andover, MA 01810-0939

Ten Easy Steps to Reduce Your Identity Theft Risk:

 

  1. Protect your Social Security Number. Be careful about giving out your SSN to businesses and individuals.
  2. Use unique passwords that include combinations of letters and numbers and to protect your personal financial information on your computer. Avoid family names as portions of your passwords.
  3. Keep your financial papers and important documents in a secure place at home.
  4. Be sure to review your personal credit report every year. An online yearly report is usually free from one of the major credit reporting agencies.
  5. Request and review your personal Social Security Administration earnings statement on an annual basis.
  6. Review your bank records monthly for questionable debit/credit card charges.
  7. Consider using a computer password management program that will automatically record and monitor your passwords.
  8. Combine password protection with anti-virus software (Windows has good protection but it can still be upgraded at little or no cost).
  9. Extremely sensitive data can be securely kept on a USB flash drive that is completely separate from a computer.
  10. Be cautious when discussing your personal information with strangers who have called you on the phone even if they provide you with some of your own identifying information.

It is extremely important that you review your personal credit report. If you suspect that your personal and/or financial and/or tax information may have been hacked or compromised you should request that at least one of the three major credit reporting agencies add a fraud alert to your file:

  1. Equifax, www.Equifax.com, 1-800-525-6285
  2. Experian, www.Experian.com, 1-888-397-3742
  3. TransUnion, www.TransUnion.com, 1-800-680-7289

Additional information regarding this subject can be found on the official IRS website at www.irs.gov

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