IRS Update: Response to Identity Theft

Even before identity theft rose to the top of the IRS’s annual “Dirty Dozen” list of tax scams for the 2012 Filing Season, the IRS has been focusing on preventing, detecting, and resolving identity theft cases as quickly as possible. Identity theft is one of the most complex issues the IRS handles due to the growing demands for getting refunds out quickly as well as the screening process that identifies false returns before the refund is issued.

Some of the ways the IRS is working to prevent identity theft are:

• Instituting new fraud filters this year to help detect returns filed by identity theft perpetrators.
• Implementing the Identity Protection PIN program for which the IRS will issue a 6-digit “Identity Protection PIN” to a taxpayer who has been a victim of identity theft. This helps the IRS ensure that the processing of the taxpayer’s return is not delayed.

One way a taxpayer may get their first indication that they have been a victim of identity theft is when they receive a notice from the IRS indicating that:

• More than one tax return was filed using the taxpayer’s name and SSN.
• They received wages from an employer they did not work for.
• They have a balance due refund offset or have had a collection taken against them for a year that they did not file.

Click here to read the entire CrossLink Tax Update which includes more information on the IRS response to identity theft.