We are seeing a growing trend of personal information and account data being hacked from major retailers, financial institutions, even the IRS. The compromised data is often used to steal the identiy of a person, and to take advantage of their financial assets. The IRS warns that not every data breach can be classified as identity theft. However, there are times when someone files a fraudulent IRS tax return in another taxpayer’s name in order to take the associated refund. Often, the return is filed very early in the process and the refund is processed, cashed and gone before the actual taxpayer prepares and files their own returns.
If the IRS suspects fraud they will notify you. The IRS has recently released guidelines for those who have become victims of a data breach. You must track the data that has been stolen, and it must relate to information that applies to your tax return. For example, a stolen credit card (while painful and perhaps a bit costly) does not affect your IRS tax return. If you’ve received information that your e-file is rejected as a “duplicate” follow these steps:
- Submit an IRS Form 14039, Identity Theft Affidavit
- Continue to file your tax return, even if you must do so by paper, and attach the Form 14039
- Watch for any follow-up correspondence from the IRS and respond quickly
The IRS is not an agency to trifle with, and these types of cases can result in unwarranted headaches for taxpayers, including an IRS audit. If you are concerned about fraudulent activity on your taxpayer ID contact the IRS immediately.
