In some cases, especially in light of the economic relief provided during the Covid-19 pandemic, fraudsters may attempt to file a tax return using your personal information. This is done in an attempt to get your tax refund dollars. Most often, if you've become a victim of tax fraud, you won’t find out until after the second return has been filed. This could be the legitimate return from you or the fraudulent return from person who has stolen your information. Either way, you'll want to take the necessary steps listed below to ensure the IRS is aware of the situation.
IRS Notice
When the IRS receives two (or more) tax returns with the same Social Security number listed, the second return filed will be rejected. The IRS should also send a written notice in the mail with instructions on how to report the fraudulent return. Even if you don't receive a letter in the mail, you can still submit a report to the IRS if you think you're at risk.
**You can request a copy of a fraudulent tax return using IRS Form 4506-F. With this, you must include your: (1) name and SSN, (2) mailing address, (3) tax year(s) of the fraudulent return(s) you are requesting, and (3) signature. Either mail or fax this form to the IRS directly.
Form 14039
If you've been a victim of tax fraud, you’ll want to use IRS Form 14039 to alert the IRS. This is also called an Identity Theft Affidavit.
After you complete it, you'll attach the form to the back of your tax return and mail them both according to the instructions on the IRS Form. You will also need to submit a copy of your Social Security card and driver’s license. If you don’t have a driver’s license, you can use a U.S. Passport, military ID or other government-issued identification card.
The IRS will send you a letter about 30 days after they receive your completed form, to let you know they got it. If they need any additional information, they might call you.
Identity Verification Request
If the IRS identifies a suspicious tax filing with your SSN listed, they will stop it and send you Letter 5071C, requesting to further verify your identity. Please note that these notices will only come via mail, not through phone or email - please beware of scammers.
To verify, you can either call them or use their online identity verification service. The online service is the preferred (and quickest) method, but either way you'll need the following information handy:
Your name, date of birth and contact information
Social security number (SSN) or individual taxpayer identification number (ITIN)
Your prior year tax return and any supporting documents if you filed them (ex: W-2s, 1099s, Schedules A and C)
In the case that your identity cannot be verified online, you will need to call the number listed in the letter. Should that method not successfully confirm your identity, you'll be asked to schedule an appointment at your local IRS office to verify in person.
If you do receive Letter 5071C this tax season, you'll want to act as fast as possible. Until the IRS hears back from you, your tax return will remain unprocessed, and you won't be able to receive any refunds. Additionally, a fraudulent return proves that someone else has access to your sensitive personal information, so you're at a much higher risk of other forms of identity theft.
If you or someone you know has fallen victim to tax fraud or any other form of identity theft, contact the Cyrus Team and we'll do everything we can to get you on the road to recovery.