One of the ways we find out someone is a victim of ID theft is when we e-file their return. The electronic submission is rejected by the IRS because one of the social security numbers on it was already used to file another person’s return. Most often this is the result of dependent children who go to college and learn the wonders of education credits if they claim themselves when they file their returns looking to get extra money back. When Mom and Dad e-file their return claiming the child, their return is rejected. The point is, talk to your kids about who claims who. If your return is rejected, it’s not necessary to panic. Though a child claiming themselves may or may not be appropriate, I would not consider this fraud as in the example above. However, filing a return to claim a refund using someone else’s social security number is fraud.
In the event it happens, common sense and conventional modern wisdom tell us to cancel credit cards, notify banks, call your ID theft protection provider, etc. What about informing the IRS?
If you have reason to suspect you are a victim, another important thing to do is let the IRS know your situation immediately. In the past I’ve dealt with engagements that took up to 18 months to resolve and obtain the refund sought. The main reason it took so long is that the IRS had to establish who was actually due the refund and which return was fraudulent.
Now we have form 14039 “Identity Theft Affidavit” to help serve as legal evidence that you are the victim of the identity theft and not the perpetrator. This form is used to both substantiate that an actual identity theft has occurred and to mark your account as a possible identity theft victim. This could save you considerable time and effort in trying to file your tax returns and will help reduce delays in receiving your refunds.
If you are a client, please contact our office immediately if you believe you may have been a victim of identity theft and we will complete the form for you to sign and mail in to the IRS.