Identity theft is a major problem taxpayers want to avoid. The IRS website has a lot of common sense information available on how to protect yourself, such as: don’t carry around information that contains your Social Security number or individual taxpayer identification number; don’t give out your information to just anyone who asks, make sure the person asking for your information requires it for a legitimate purpose; safeguard your financial information, both in and outside of your home (including security measures to protect your computer); check your credit report every 12 months; and avoid giving out personal information via phone, internet, or mail unless you are the one who initiated the conversation or you know the person you are trusting with your information.
Good advice, but what should you do if you think (or know) that some of your personal information has already been compromised? The following questions will likely arise when an individual’s identity is stolen and the answers provide guidance on what steps to take.
- What do I do if someone steals my purse or wallet, or if I see something suspicious on my credit card statement or my credit report?Call the IRS Identity Protection Specialized Unit (IPSU) toll-free at 1-800-908-4490, Monday – Friday, 7 a.m. to 7 p.m., local time. This allows the IRS to secure your tax account, making it difficult for an unauthorized entity to access your tax return information at a later date. You will have to fill out IRSForm 14039, Identity Theft Affidavit; a form to report actual identity theft or potential problems with identity theft.
- What do I do if I receive an IRS notice?The IRS suggests you call the number on the notice immediately. If you receive a tax notice, it may be prudent to contact your tax advisor and share the notice with him/her, especially if you don’t understand the notice. We are always willing to assist clients with tax issues.IRS notices to the taxpayer that may indicate fraudulent use of your personal information include: notice of multiple tax returns filed for the same year; notices concerning refund offsets, balances due, or collection action(s) on year(s) for which you did not file a tax return; cancellation or reduction of state or federal benefits due to information of an income change; and IRS notification that their records indicate you received more wage income than you reported on a tax return (or received wage income from an employer for which you do not work).
- Who else should I notify of identity theft?The IRS recommends that you also notify the following entities:
- Your local police department;
- The Federal Trade Commission (FTC): Identity Theft Hotline 1-877-438-4338, via internetwww.ftccomplaintassistant.gov/#crnt, or by mail at FTC Identity Theft Clearinghouse, 600 Pennsylvania Avenue NW, Washington, DC 20580;
- The following three nationwide credit reporting companies in order to file a fraud alert:
- Equifax @ 1-888-766-0008 or www.equifax.com
- Experian @ 1-888-397-3742 or www.experian.com
- Trans Union @ 1-800-680-7289 or www.transunion.com
- Banks and other financial institutions to close any accounts that were opened or used without your authorization and/or accounts that you do not use;
- The Internet Crime Complaint Center (IC3) – Notify the IC3 if you have information about internet identity theft. A list of information that is helpful to the IC3 is available by clicking on the FAQ link in the first paragraph on the main website. The IC3 is co-sponsored by the FBI and the NW3C (National White Collar Crime Center). Once the complaint is filed and processed, it can be referred to law enforcement and/or regulatory agencies for possible investigation.
- I’m protecting my own identity, but a family member died recently. Do I need to do anything to protect their information?Unfortunately, identity theft doesn’t stop when a person dies, so it is important to safeguard the personal information of a deceased person. In fact, stolen identities of deceased persons is so prevalent that the IRS recommends limiting the information that is printed in an obituary, such as birth dates, maiden names, addresses, or any other information that may assist an identity thief. Other ways to protect the deceased’s identity: send copies of the death certificate to the IRS and the three credit reporting bureaus listed above. Review the credit bureau reports for odd or post-death activity and ask that a “deceased alert” be put on the deceased’s credit reports. Additionally, all financial institutions at which the deceased held accounts and/or credit cards should be notified as soon as possible after the date of death.
Identify theft for individuals is a major issue and one taxpayers should be prepared for in the event an instance occurs. BSSF is available to assist you with tax problems that arise from identity theft issues and all of the above information is available on the IRS website.
ABOUT THE AUTHOR
Janis L. Banks, CPA
Janis is an Audit Manager with Brown Schultz Sheridan & Fritz with over 14 years of tax and auditing experience. She provides audit assistance to local municipalities and not-for-profit organizations. Janis is customer service oriented and enjoys bringing a personal touch to individual income tax preparation. Before working in the accounting field, she spent over a decade as a healthcare professional.