IRS / ITRC Fact Sheet 143
Part I: How Identity Theft Affects your Taxes
Part II: What the IRS is Doing to Combat Identity Theft
The following information has been provided to the ITRC by the Internal Revenue Service (IRS) Office of Identity Protection. This IRS/ITRC Fact Sheet gives the consumer or victim a comprehensive look at the efforts of the IRS to address IRS issues caused by identity theft.
Part I: How Identity Theft Affects your Taxes
There are several situations in which identity theft can affect the processing of a tax return. Most involve someone misusing someone’s Social Security number (SSN), which the IRS uses to make sure the filing is accurate and complete and that they get any refund they are due.
It could be a sign of identity theft if a taxpayer receives an IRS notice that:
- More than one tax return was filed for one tax year, or
- IRS records indicate a taxpayer received wages from an employer they don’t know.
If someone uses a taxpayer’s SSN to file for a tax refund before the taxpayer does, the IRS may believe the taxpayer has already filed and received their refund. The taxpayer might not know this until they get a letter from the IRS indicating that more than one return was filed for them.
If someone has used a taxpayer’s SSN to get a job, the employer may report that person’s income to the IRS using the taxpayer’s SSN, making it appear to the IRS as if the taxpayer did not report all of their income on their tax return. In that situation, the IRS might send the taxpayer a notice that they appear to have received wages from an employer they don’t know.
If You Suspect Identity Theft - Contact the IRS
If you get a notice from the IRS, respond immediately to the name and number printed on the notice. If you think you have tax issues related to identity theft, let the IRS know as soon as possible, even if you don’t have any evidence that it’s affected your tax return. Contact the IRS Identity Protection Specialized Unit (IPSU) at 1-800-908-4490. The IPSU’s hours are 8:00 am to 8:00 pm (your local time).
Specialists will work with you to get your tax return filed, get you any refund you are due, and protect your account from identity thieves in the future. You can document the identity theft by submitting a police report or the IRS ID Theft Affidavit (Form 14039).
You’ll have to prove your identity with a copy of a valid government-issued identification, like your Social Security card, driver’s license or passport.
Part II: What the IRS is Doing to Combat Identity Theft
In 2007, the IRS centralized identity theft initiatives within the new Privacy, Information Protection and Data Security (PIPDS) organization, and PIPDS initiated comprehensive meetings with stakeholders across the IRS to develop and implement standardized identity theft processes. The Identity Protection (IP) team within (PIPDS) is responsible for developing and implementing Service-wide procedures and systems to identify and resolve identity theft cases impacting tax administration.
In January 2008, the IRS implemented a Service-wide identity theft indicator to track identity theft incidents that are reported by taxpayers and present an impact to tax administration. In October 2008, the IRS expanded the incident tracking program by implementing indicators to track identity theft incidents identified by the IRS through fraud detection processes, identity theft incidents reported by taxpayers that do not impact tax administration and IRS data breach incidents that increase the risk that a taxpayer may become a victim of identity theft.
The IRS has developed and implemented a total of eight identity theft indicators to address unique types of identity theft issues across the IRS.
The guiding objectives for all indicators have been – to p rotect Treasury revenue, reduce burden on identity theft victims and increase operational efficiency. These indicators will integrate with existing systems and functional procedures to facilitate the resolution of identity theft-related tax account issues.
Standardized Guidance on Identity Theft
In May 2009, the IRS published the Identity Theft Protection Program Manual (IRM 10.5.3), consisting of standardized procedural guidance on all identity theft matters. This "Hub" IRM provides IRS employees with core guidance on identity theft issues and served as the basis for the development of business unit IRMs addressing the unique aspects of identity theft processes within their respective organizations. All IRS functions impacted by identity theft rely on IRM 10.5.3 as part of their routine research material to ensure consistent treatment of taxpayers.
In October 2008, the Identity Protection Specialized Unit (IPSU) in W&I was established to serve as a central point of contact for taxpayers who had their identity stolen and wanted to notify the IRS. The IPSU provides a dedicated toll-free number (800-908-4490), staffed by English and Spanish speaking IRS employees, knowledgeable in identity theft issues, trained to review taxpayer’s information and account history, answer questions, and explain to taxpayers what actions are necessary to resolve their identity theft issues. Since inception, the IPSU has assisted over 489,000 taxpayers that have called in or sent in correspondence with issues related to identity theft. For taxpayers who do not have tax-related identity theft difficulties, the IPSU processes their substantiation documentation and places an indicator on their accounts. For taxpayers who do have tax-related identity theft problems, the IPSU researches their account, identifies which IRS business unit is responsible for working the problem and monitors these cases to ensure they are worked in a timely manner.
Since the process was initiated in 2008, the IRS has placed identity theft indicators on tens of thousands of taxpayer accounts. Use of these indicators has enabled the IRS to track identity theft incidents and to send notification letters to identity theft victims that inform the taxpayer that they are a victim of identity theft, that their tax account has been reviewed, adjusted and cleansed of any information provided by the perpetrator (in most circumstances) and explains what they should do to protect themselves from identity theft in the future. The identity theft indicators are also used to more closely evaluate tax returns submitted on taxpayer accounts that have previously been victimized by identity theft, proactively preventing hundreds of millions of dollars of fraudulent refunds from going to identity thieves related to thousands of fraudulent returns that have been prevented from processing. Returns submitted with accounts that already have identity theft markers on them are reviewed more closely to ensure that only valid returns are processed.
Taxpayers that have already been identified as victims of identity theft and notified by the IRS that they are victims will now receive an Identity Protection PIN to ensure only their return is processed, and without delay.
The IRS hosts annual tax forums in six major cities throughout the country to talk to tax practitioners about what IRS is doing. The office of Identity Protection is very involved with this summer event, providing identity theft and on-line fraud detection and prevention information to more than 14,000 practitioners from all parts of the country and providing seminars on identity theft and on-line fraud detection.
Top Thirteen Things Every Taxpayer Should Know about Identity Theft
As a proactive measure, the IRS shares the top things every taxpayer should know about identity theft with taxpayers every year. It is good guidance on how taxpayers can protect themselves and their tax information, especially during the filing season. The following is the top thirteen list:
T he IRS does not initiate contact with a taxpayer by e-mail.
- If you receive a scam e-mail claiming to be from the IRS, forward it to the IRS at firstname.lastname@example.org
- Identity thieves get your personal information by many different means, including:
- Stealing your wallet or purse
- Posing as someone who needs information about you through a phone call or e-mail
- Looking through your trash for personal information
- Accessing information you provide to an unsecured internet site.
- If you discover a website that claims to be the IRS but does not begin with ‘www.irs.gov’, forward that link to the IRS at email@example.com
- To learn how to identify a secure website, visit the Federal Trade Commission at www.onguardonline.gov/tools/recognize-secure-site-using-ssl.aspx
- If your Social Security number is stolen, another individual may use it to get a job. That person’s employer may report income earned by them to the IRS using your Social Security number, thus making it appear that you did not report all of your income on your tax return.
- Your identity may have been stolen if a letter from the IRS indicates more than one tax return was filed for you or the letter states you received wages from an employer you don’t know. If you receive such a letter from the IRS, leading you to believe your identity has been stolen, respond immediately to the name, address or phone number on the IRS notice.
- If your tax records are not currently affected by identity theft, but you believe you may be at risk due to a lost wallet, questionable credit card activity, or credit report, you need to provide the IRS with proof of your identity. You should submit a copy of your valid government-issued identification – such as a Social Security card, driver’s license, or passport – along with a copy of a police report and/or a completed Form 14039, Identity Theft Affidavit. As an option, you can also contact the IRS Identity Protection Specialized Unit, toll-free at 800-908-4490. You should also follow FTC guidance for reporting identity theft at www.ftc.gov/idtheft
- Show your Social Security card to your employer when you start a job or to your financial institution for tax reporting purposes. Do not routinely carry your card or other documents that display your Social Security number.
- For more information about identity theft – including information about how to report identity theft, phishing and related fraudulent activity – visit the IRS Identity Theft and Your Tax Records Page, which you can find by searching “Identity Theft” on the IRS.gov home page.
- IRS impersonation schemes flourish during tax season and can take the form of e-mail, phone websites, even tweets. Scammers may also use a phone or fax to reach their victims. If you receive a paper letter or notice via mail claiming to be the IRS but you suspect it is a scam, contact the IRS at http://www.irs.gov/contact/index.html to determine if it is a legitimate IRS notice or letter. If it is a legitimate IRS notice or letter, reply if needed. If the caller or party that sent the paper letter is not legitimate, contact the Treasury Inspector General for Tax Administration at 1-800-366-4484. You may also fax the notice/letter you received plus any related or supporting information to TIGTA. Note that this is not a toll-free FAX number 1-202-927-7018.
- While preparing your tax return for electronic filing, make sure to use a strong password to protect the data file. Once your return has been e-filed, burn the file to a CD or flash drive and remove the personal information from your hard drive. Store the CD or flash drive in a safe place, such as a lock box or safe. If working with an accountant, you should query them on what measures they take to protect your information.
- If you have information about the identity thief that impacted your personal information negatively, file an online complaint with the Internet Crime Complaint Center (IC3) at www.ic3.gov. The IC3 gives victims of cyber crime a convenient and easy-to-use reporting mechanism that alerts authorities of suspected criminal or civil violations. IC3 sends every complaint to one or more law enforcement or regulatory agencies that have jurisdiction over the matter.