Tax-related Identity Theft

With the recent news regarding data breaches of personal information, the risk of tax-related identity theft continues to increase. Tax-related identity theft occurs when unauthorized persons either impersonate the taxpayer or the IRS to attempt to obtain personal information, claim fraudulent refunds, or to obtain payment of fictitious tax liabilities.  Client data security is of the utmost importance to us. We have therefore provided some advice about protecting yourself against tax-related identity theft and the financial havoc that may ensue should you be subject to it.

IRS Emails or Telephone Calls

In general, the IRS will send important notices about changes to your tax liabilities via mail. E-mails or phone calls purporting to be from the IRS and requesting personal information or threatening dire consequences unless a supposed tax bill is paid immediately is a scam known as “phishing.”  The IRS will never initiate contact with you via email or phone to request personal information.  Never provide personal information (including your PIN) over the phone or via email. If you receive any sort of communication from an individual or organization  posing as a taxing authority, we urge you to contact us immediately so that we can assist you in verifying the authenticity of the communication.

IRS Correspondence

While most correspondence via mail from the IRS are legitimate queries, we would also recommend that you contact us to verify the authenticity of any written communications as well. A client recently received a notice that appeared to have originated from the IRS. This notice requested personal information. After reviewing the letter and checking with the IRS directly, we determined that this was also a phishing scam.

IRS Response to Tax-related Identity Theft

The IRS is fully aware of the recent uptick in tax-related identity theft and has begun to put measures in place to try to prevent these crimes.

Report suspicious online or emailed phishing scams to For phishing scams by phone, fax, or mail, call 1-800-366-4484. Report IRS impersonation scams to the Treasury Inspector General for Tax Administration’s IRS Impersonation Scams Reporting.

One of the ways in which the IRS is trying to prevent tax-related identity theft is to verify taxpayer identity for a filed tax return which might request a large refund or might not be in line with a taxpayer’s previous filings. The IRS will send you a notice that will request that you report the following:

  • More than one tax return filed using your SSN.
  • Information indicating you received wages or income from an employer for whom you
  • Further verification of your identity (Notice 4883C).

Once it has been determined that you are a victim of identity theft, the IRS will request that you complete Form 14039, Identity Theft Affadavit, which will ask you to verify your identity by providing copies of some additional identification. Once processed, the IRS may also issue you an Identity Protection PIN as an additional measure of security when filing your tax returns.

Additional Steps for Avoiding Identity Theft

Here are some helpful tips that you can implement now in order to prevent identity theft from occurring. If you are the victim of identity theft, here are some guidelines that the IRS recommends.

Your team at Realize CPA is here to help you proactively prevent tax-related identity theft. Please contact us if you have any concerns or questions about keeping your data safe.