Actions to Take for Fraudulent Tax Return Filings

Typically, scammers will file as soon as the filing window opens so they can claim your refund before you have a chance to file and report fraud. If the IRS finds any issue with the fraudulent return, you will be notified. But if not, you will not be notified until they receive the second return – the one that you actually file. 

You might be a victim of tax-related identity theft if you are contacted by the IRS or your tax professional regarding any of the following situations: 

  • Another return has already been filed with your Social Security number. 
  • You owe additional tax or a refund offset. 
  • Collection actions have been taken against you for a tax year in which you did not file a return. 
  • IRS records indicate that you received wages or other income from an employer that you have not worked for in the past. 

In recent years, the IRS and online tax preparation services have taken steps to combat fraudulent returns. Security measures have been heightened and now require you to provide additional information to confirm your identity and stronger passwords. The number of reported tax fraud victims has dropped significantly since 2015 because of these enhanced defenses and improved communication between the federal and state governments, as well as national tax professional groups and software preparation companies. 

5 STEPS TO TAKE IMMEDIATELY 

If you discover that someone has filed a fraudulent tax return using your Social Security number, complete the following steps immediately: 

  • Alert the IRS as soon as possible by filing IRS Form 14039. Click here to download the form. When filing this form, you will need to include copies of your Social Security card and driver’s license, as well as a copy of the fraudulent return alert from the IRS (if you received one).  
  • You may receive letter 5071C from the IRS requiring you to identify yourself. The letter will provide a phone number you can call to prove your identity. Remember, the IRS will never request this information via email, only hard copy. An email from the IRS requesting any personal information will always be fraudulent.
  • Call the credit reporting agencies to place a fraud alert or credit freeze on your report. A fraud alert or credit freeze does NOT affect your credit score.  
    • Equifax: (800) 685-1111 
    • Experian: (888) 397-3742 
    • TransUnion: (888) 909-8872 
  • File an identity theft report with your local police department as well as with the Federal Trade Commission (FTC). Click here to file a report with the FTC.  
  • Contact your Relationship Manager to change your account number. We can change this information without you having to complete new paperwork.  
REDUCE YOUR RISK OF TAX-RELATED IDENTITY THEFT 

Tax-related identity theft is a serious and frightening occurrence that can disrupt the course of your financial plan. Below are some tips on how to protect yourself from identity thieves and scammers:   

  • Use security software with anti-virus and firewall protection. 
  • Diversify your passwords across different logins and use various characters (numbers, letters of both upper and lower case, and symbols (as allowed)). 
  • Do not click or download any links or attachments within suspicious emails. 
  • Do not routinely carry important personal identification documents with you. Store them in a secure place. 
TAX CONSIDERATIONS CHECKLIST 

Are you confident that you or your CPA have checked all the boxes when it comes to your tax-related needs, your life events, and possible opportunities to reduce your tax liability? Download our Tax Considerations Checklist and see which items are important to consider in your financial plan and what you may be missing.

Download the Checklist