IRS Cracks Down on Identity Theft

There is perhaps, no bigger problem facing the users of technology, including the Internal Revenue Service, than identity theft. Identity theft places a burden on its victims and presents a challenge to businesses, organizations and government agencies, including the IRS.

Tax-related identity theft occurs when someone uses a stolen social security number to file a tax return claiming a fraudulent refund. Per their website, the IRS combats tax-related identity theft with an aggressive strategy of prevention, detection and victim assistance. Progress against this crime is being made, but it remains one of that agency’s highest priorities.

In its efforts to combat identity theft, the IRS is stopping suspicious tax returns that have indications of identity theft, but contain a real taxpayer’s name and/or social security number. In these cases, the IRS is sending out (by US Postal Service) Letter 5071C to request that the taxpayer verify his/her identity. Remember, the IRS will never email or telephone the taxpayer directly to request this information.

Taxpayers may use the IRS site: IDVerify.irs.gov (noted by the IRS as the safest, fastest option) or call a toll-free number on the letter to confirm their identities. Once their identities are verified, taxpayers can confirm whether or not they filed the return in question. If so, it will take approximately six weeks to process it and issue a refund. If the real return was not filed by the taxpayer, the IRS can take steps at that time to assist him/her.

Click here to read the complete release: IR-2015-54, dated March 18, 2015.

Picture of Don Johnston

Don Johnston

Don, a partner in the Tax Services Group, has over 30 years of public accounting experience. He has spent the majority of his career serving the tax and consulting needs of privately-held companies and their owners. Don also has expertise with issues related to business entity formation, transactions and exit planning.
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