Understanding Tax-Related Identity Theft

Becoming the victim of identity theft is never something that is a pleasant experience. Along with the fear regarding the actual event, there is also the aftermath that must be considered and dealt with. It can sometimes take years to completely see the full effects of identity theft, but by learning more about the different types, it is much easier to get started making repairs.

Tax-Related Identity Theft
You can become a victim of tax-related identity theft when someone steals your social security number and files a tax return. Usually, this is something that will be discovered when you complete your annual tax forms. You are most likely to discover that a thief has stolen your social security number and filed a return before you had a chance to file yours.

If the IRS receives two tax returns for the same social security number, you will be notified that a return has already been filed. This is the first sign that you are a victim of tax-related identity theft. However, there are also other things that may indicate that you are a victim of this type of crime.

Other ways you can be a Victim
Another factor that indicates you are a victim of tax-related identity theft is when another person uses your social security number to obtain a job. This is also something that you are not likely to notice until you file your taxes for the year.

At this time, the IRS will likely inform you that you owe more taxes than you really are obligated to pay. Another scenario is that you will receive a penalty for not reporting wages earned for an employer that you are not employed with.

Steps to Take
The first thing that you must do when you have discovered that you are a victim of tax-related identity theft is to notify and file a report with law enforcement. You must then file a second report at www.ftc.gov or call 1-800-908-4490.

Along with this, you will need to contact all three of the major credit bureaus in order to place a fraud alert on your records. The bureaus that you will need to contact are; Equifax, Experian and TransUnion. You will also need to talk to your financial institution and look into closing accounts that have been opened under your name.
Responding to the IRS

One of the most difficult portions of this entire process is the steps that you must go through when responding to the IRS. This is something that can be very complicated and there are specific forms that you must fill out and provide to them.

You will also need to continue to file your taxes and pay the amount that is due. Sometimes, this will mean that you must file your taxes through a physical paper form rather than electronically. To help with this process, it is always best to rely on a reputable CPA firm like Klein Hall. With their assistance, you will be able to rest assured that everything is being handled properly.

Be sure to contact us to learn more about this process.