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Taxes and Identity Theft – What You Need to Know

Imagine that you’ve gone through all the work of completing your taxes. The forms are gathered, filled out, and submitted. And the best part? You get a return this year.

All you need to do is sit back and wait for the money to arrive in your back account.

But it Doesn’t Come

Instead, you receive a letter from the IRS informing you that your taxes have already been submitted for the year. Cue the sad music. You’re a victim of tax identity theft.

Theft and Taxes

In case you didn’t know, tax season is a popular time for identity thieves to wreak havoc. For the 2013 tax year, the IRS paid out $5.8 billion in false refunds to identity thieves. And it’s only gone up since then.

All a thief needs is your social security number. After that, they create a fake W2 that guarantees a nice refund, and they submit your taxes with their bank account. The IRS doesn’t immediately verify W2 information from employers until after the payment is already made. By then, it’s too late.

What to Do If It Happens

If it happens to you, you’ll receive a letter from the IRS informing you that your taxes have already been submitted. The first thing to do is contact the IRS immediately and let them know the situation. You’ll have to then verify that you are the real you.

This will be done through mail only.

You will also have to fill out a form 14039. Once everything is completed, you’ll be waiting for a little while. Though the IRS says an identity theft claim should be resolved in 180 days, it often takes up to 278 days.

How Can I Prevent This from Happening to Me?

The simplest ways to avoid tax identity theft is to a. guard your social security number and b. file your taxes early. If you file your taxes first, the fraudulent submission will be rejected.

There are Other Ways They Get You

Another theft method used during tax season is posing as a fake IRS agent. A person calls pretending to be the IRS, demanding that you give payment information to avoid penalties and fees.

This method can be very confusing because the IRS will actually call you in an attempt to collect overdue taxes. Ultimately, you should be very cautious when dealing with a caller that claims to be the IRS.

It’s best to avoid giving any payment information over the phone.

The Best Way to Avoid Tax Problems is to Use a Professional

An experienced tax pro will ensure your taxes are done quickly and accurately, keeping you at a safe distance from the IRS and potential thieves. Should an issue arise, they can help you through that as well.

LWS is here for any accounting help Springfield, Ohio residents need, whether it’s personal taxes, business taxes, payroll, or general accounting. Contact us today to get started!

Posted by admin | in Accounting, Individual Tax