How do you know if someone has filed a tax return using your information? What do you do once you find out?
Tax refund fraud is increasing rapidly over these past few years. The latest General Accounting Office (GAO) report claimed that the IRS paid over $5.8 billion in fraudulent returns in 2013. While the IRS does have security measures in place to verify how accurate tax returns and social security numbers are, this isn’t keeping the criminals from filing returns with other people’s information – early and frequently.
We suggest that you file your return as early as possible to prevent becoming a victim of income tax refund fraud. When you file later, you have given the criminals time to file and receive your tax refund money.
Additionally, if you ever receive a notice from the IRS that makes you suspect that, someone has used your social security number fraudulently, or if your return is rejected, you need to notify the IRS immediately by giving them a call at 900-908-4490. In addition, in order for the IRS to mark that your account is having questionable activity, you have to complete Form 14039. This form can be mailed or faxed to the address or number listed on the form. (Do not do both as it will delay your form being processed).
The IRS is aware of what these criminals are up to and they are doing things to prevent it from happening. Some precautions that they are using include monitoring internet IP addresses where multiple returns are filed and monitoring how long it takes for returns to be filled out online. Criminals usually fill out returns quickly, unlike many taxpayers, who have to take their time to be sure that the information is correct. Additionally, taxpayers are receiving personal pin numbers (IP PIN), to help keep their identities protected.
IP PINS are six digit numbers assigned by the IRS to those who think that they are the victim of identity theft. This prevents your social security number from being misused on fraudulent federal income tax returns. Not all taxpayers will receive one, but if you think you are the victim of identity theft, you can request one.
Many taxpayers feel it is safe to go to a licensed professional to get their tax returns prepared. Enrolled agents (EAs) get their license from the IRS and have to undergo a background check. They abide by the code of ethics and earn annual continuing education. You can find an enrolled agent in good standing in the directory of the National Association of Enrolled Agents.