IRS crackdown on identity theft

Real Estate Tax Talk

By Inman News Feed
Add Comment Add Comment | Comments: 1 | Posted Feb. 3, 2012

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Real Estate Tax Talk

Stephen Fishman
Inman News®

Here's an easy way for an identity thief to make money: Use the victim's Social Security number to file a forged tax return and claim a refund.

The fake return is usually filed early in the tax season, before the real return is filed. You may be unaware that this has happened until you file your return later in the filing season and discover that two returns have been filed using the same Social Security number.

The Internal Revenue Service is well aware of this problem and is trying stop it. Last week, as part of a stepped-up effort against refund fraud and identity theft, the IRS and the U.S. Justice Department conducted a massive national sweep targeting suspected identity thieves.

The IRS has also stepped up its internal reviews to spot false tax returns before tax refunds are issued.

How do you know if you're an IRS identity theft victim?

One way is if you receive an IRS notice or letter stating that:

  • more than one tax return for you was filed;
  • you have a balance due, refund offset or have had collection actions taken against you for a year in which you did not file a tax return; or
  • IRS records indicate you received wages from an employer unknown to you.

If you believe someone may have used your Social Security number fraudulently, notify the IRS immediately by responding to the name and number printed on the notice or letter. You will need to fill out the IRS Identity Theft Affidavit: Form 14039.

If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost or stolen purse or wallet, questionable credit card activity or credit report, contact the IRS Identity Protection Specialized Unit at 800-908-4490.

How to reduce the chance of becoming a victim

The IRS recommends that you take the following stops to reduce the chance of becoming an identity theft victim:

  • Don't carry your Social Security card or any document(s) with your Social Security number on it.
  • Don't give a business your Social Security number just because they ask. Give it only when required.
  • Protect your financial information.
  • Check your credit report every 12 months.
  • Secure personal information in your home.
  • Protect your personal computers by using firewalls, anti-spam/virus software, update security patches, and change passwords for Internet accounts.
  • Don't give personal information over the phone, through the mail or on the Internet unless you have initiated the contact or you are sure you know who you are dealing with.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

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1. adam wilson said... on Feb 4, 2012 at 10:23AM

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