IRS Will Notify Victims Where their SSN has been used for Employment Purposes

Beginning January of 2017, IRS will begin to provide notification to individuals whose social security numbers have been used for employment purposes by a third-party.  Not all stolen/borrowed SSN’s are used to file income tax returns; many are used to obtain a job or driver’s license, a loan, a credit card or other form of identification.   IRS has been dealing with this issue--“employment related identity theft”-- for more than 30+ years and at that time called it the “scrambled SSN program.”   Generally, an individual will find out if a SSN has been used for employment purposes when IRS sends out the CP 2000 Notice stating that an individual’s income was understated due to failure to report income from a Form W-2 or 1099 for a company they have never heard of, generally out of state.  For some this is the first indication of the use of the SSN for fraudulent means.

Responding to the CP 2000 will generally clear up the issue and IRS will flag the SSN to avoid sending out further notification of adjustments related to that SSN.

Now IRS intends to provide information to these victims of employment-related identity theft, based on a pilot program developed in 2014. At that time Letter 4491C was used as the identification vehicle, it is unknown if the letter will be used in the future.  As more information is released, we will keep you updated.