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A Warning about Tax-Related Identity Theft

TaxAlerts Tax Article

June 2011 | Written by: Karen Reed, EA

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Tax related identity theft involves the practice of using stolen social security numbers to obtain employment or tax refunds. In 2010, there were 248,357 cases of this type of fraud reported by the Government Accountability Office, almost a five–fold increase over the number of cases reported in 2008. In response to the unexpected growth, the IRS is upgrading safeguards for e–filers as well as the customer services it provides to victims.

Although the staff has doubled in the special IRS unit dedicated to assisting taxpayers facing identity theft, the tax issues created by these situations are difficult for fraud victims to resolve. At a recent House hearing on identity theft, IRS Commissioner Doug Schulman apologized personally to victims who testified that they were treated rudely by agency personnel. He said the training for telephone representatives is being reviewed as a first step in addressing the problem.

Besides safeguarding your social security number, there is little you can do to prevent tax–related identity theft. You should be alert to the possibility of an identity theft if you receive a letter from the IRS indicating that more than one tax return was filed for you, or that you received wages from an employer that is unknown to you.

If you believe you have been a victim of tax–related identity theft, contact the IRS Identity Protection Specialized Unit at 800–908–4490 for guidance on how to resolve your issue. You may be required to prove your identity by providing copies of your driver license or passport, along with a police report or IRS Identity Theft Affidavit (Form 14039).