IRS Identity Fraud Filters Working Overtime

March 11, 2015

Overview

It appears that IRS ID Theft Filters are working overtime this season, kicking out thousands of letters about possible ID Theft.

Form 5071C

These letters, which are labeled as Form 5071C, are generally coming from the Austin, Texas, campus.

If your client has not yet filed a 2014 return, use the notice to corresponded with IRS concerning the issue.  If your client has already filed, you can use the ID Verify website to identify your client's identity. IRS will then continue to process the return.  
 

Letter CP 12C – SSN open

IRS is also using CP12C which appears to be an ID Theft letter as well.  Follow the same criteria as above.

Change of Address Letters  CP 148A or CP 148B

Finally, IRS is doing some comparison of W-2’s and the tax return where addresses between the two are different.  One of the scams that have been haunting practitioners is scammers who use a person Identity but use a different address on W-2 or 1040.  IRS as part of the ID Theft program is sending out address verification letters. If all is well there is nothing the client is required to do, if not your client will need to comply with the letter.

Season is half way over, so hang in there, I think the notice season will probably be worse than filing season, brace yourselves – but I could be wrong.

Steps to Take if Client is Victim of ID Theft

If your client is a victim of ID Theft, here is the current process to follow, based on what we currently know. IRS has not provided any additional guidance than what we had last year.

  • Form 14039 is your gateway in the identity theft unit.  I am here if you have questions.
  • If your client has received a notice CP 12C or Letter 4883C or Letter 5071C that they need to verify  or provide additional information follow these procedures to respond.
    • If the clients return has not been filed:
      • Respond to the notice and provide the current status of the return.
    • If the return has been filed,
      • try the phone number (probably impossible) or
      • try ID Verify, if the client cannot get that accomplished then respond to the notice as best as you can and provide basic information if the notice defines what IRS needs.
      • Send response to the address on the notice.   Many of these are vague and you may not be able to determine what is needed.  In this case provide a copy of pages one and two of the filed return marked (FOR INFORMATION ONLY DO NOT PROCESS ON THE COPIES) and then provide any other documents that would support what is on that return to verify income and withholding, usually a W-2 is sufficient.
    • If the clients return is ready to file, then try to e-file and you probably will get a rejection.  Keep the code and remember to file the Form 8948 with the return and note it in Box 4 of the Form 8948. Attach the completed Form 14039 and the required documentation.  Also, attach the letter received and send to the Campus on the letter for processing.

Taxpayer Guide to Identity Theft

Know the warning signs

Be alert to possible identity theft if you receive an IRS notice or letter that states that:

  • More than one tax return was filed using your SSN;
  • You owe additional tax, refund offset or have had collection actions taken against you for a year you did not file a tax return;
  • IRS records indicate you received wages from an employer unknown to you.

Steps to take if you become a victim

  • File a report with the local police. Many times now police will not take the report as the issue is so wide spread, but you can try.
  • File a complaint with the Federal Trade Commission at www.identitytheft.gov or the FTC Identity Theft Hotline at 1-877-438-4338 or TTY 1-866-653-4261.
  • Contact one of the three major credit bureaus to place a ‘fraud alert’ on your credit records:
  • Close any accounts opened without your permission or tampered with.
  • If your SSN is compromised and you know or suspect you are a victim of tax-related identity theft, take these additional steps:
    • Respond immediately to any IRS notice; call the number provided if you can get through
    • Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form at IRS.gov, print, then mail or fax according to instructions.
    • Continue to pay your taxes and file your tax return, even if you must do so by paper.
  • If you previously contacted the IRS and did not have a resolution, contact the Identity Protection Specialized Unit at 1-800-908-4490. We have teams available to assist.

How to reduce your risk

  • Don’t routinely carry your Social Security card or any document with your SSN on it.
  • Don’t give a business your SSN just because they ask – only when absolutely necessary.
  • Protect your personal financial information at home and on your computer.
  • Check your credit report annually.
  • Check your Social Security Administration earnings statement annually.
  • Protect your personal computers by using firewalls, anti-spam/virus software, update security patches and change passwords for Internet accounts.
  • Don’t give personal information over the phone, through the mail or the Internet unless you have either initiated the contact or are sure you know who is asking.

The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels.

 

keywords: IRS ID theft filter, ID theft, form 5071C, CP12C, change of address, CP148A, CP148B, form 14039, letter 4883C, letter 5071C, ID verify, form 8948

 

 

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