The holiday season is about to start so it may seem churlish to mention 2016 taxes right now. However, to invoke a cliche, thieves and scammers don't take holidays and they operate their identity theft schemes year round. So now is a good time to learn about a key change the IRS has made concerning tax related identity theft. I hope, of course, that no one ever needs to use this information. But if you do, it's good to know where to find the resources to be pro-active.
The IRS very recently issued "Instructions for Requesting Copy of Fraudulent Returns" ("Instructions"). These "Instructions" can be found by typing in the full title in the Search bar at the top right hand corner of the IRS website (www.irs.gov). Why are these "Instructions" significant? For two very important reasons:
1. Tax related identity theft is extremely complex, difficult and frustrating to resolve; and
2. Previously, a taxpayer couldn't learn anything about a fraudulent return filed using his Social Security Number (SSN) and name.
Tax related identity theft can happen numerous ways. The one being addressed by these "Instructions" is when a fraudulent tax return is filed before the legitimate taxpayer files his or her return. Under this scenario, the thief might get a tax refund; the legitimate taxpayer gets a letter saying her return is not being accepted because a prior return has already been filed using her SSN and name.
Under these "Instructions." the victimized taxpayer will now be able to get a copy of the fraudulent tax return. The copy will likely contain some redactions. This means the copy won't satisfy the requesting taxpayer's understandable desire to know the thieve's identity. However, even with redactions, the fraudulent copy will provide sufficient information to the taxpayer will see how much personal information was stolen and how it was used.
What does the taxpayer need to do to get a copy? There are different requirements depending on whether the person requesting the copy is the person whose SSN and name were used or if the person is someone authorized to obtain the theft victim's tax information. All of these requirements, as well as FAQs and other information (e.g., time for processing requests) are outlined in the "Instructions."
However, very briefly, here are some of the requirements if the requester is the person whose SSN and name were used on the fraudulent return. The person needs to send a letter to the IRS address listed in the "Instructions." The letter needs to include the person's name and SSN; mailing address; the tax year(s) of the fraudulent return(s) for which copies are requested; the statement "I declare that I am the taxpayer" right above the requester's signature; and a copy of a government-issued form of identification (e.g. driver's license or passport).
One important caveat in the "Instructions": due to the federal privacy laws, the person requesting the copy must be listed either as the primary or secondary taxpayer on the fraudulent return. The IRS can't disclose tax information to anyone listed as only a dependent on the return.
The "Instructions" have a helpful chart comparing the information that is listed on a tax return with the information that will be redacted. There is also a link at the bottom of the "Instructions" to the IRS' "Taxpayer Guide to Identity Theft"; this is another resource to help taxpayers know the pro-active steps they can take either to prevent becoming an identity theft victim or if they think or know they have become one.