If you have ever experienced the disappointment of discovering that someone else has filed a tax return in your name when you were preparing to e-file your taxes, then you are not alone. Even though the IRS has made significant progress in reducing tax identity theft, many people are still affected by this stressful situation.
The reason for this is that criminals often obtain your Social Security number and use it to file a fake tax return, claiming the refund that should have been yours. This not only deprives you of the money but also leaves you with the hassle of clearing up the resulting administrative mess.
Moreover, despite this situation, you are still required to report the issue to the IRS, although they may have already contacted you in some cases. Additionally, you will still need to file your genuine tax return. Finally, if you are owed a tax refund, you will have to wait in line for it. It's definitely a hassle.
Taking time
If you have become a victim of tax-related identity theft, it can take a lot of time and effort to sort things out, correct your records, and recover from the potential crime. Unfortunately, there is no easy way to deal with the aftermath of tax-related identity theft, and you will need to go through a step-by-step process to resolve the issue.
The first step is to inform the IRS about the problem. If you have received a notification from the IRS website or a letter in the mail informing you of multiple tax returns filed under your name, you should contact the IRS Identity Protection team at 800-908-4490 immediately. They have advisors who can guide you through the process and answer any questions you may have.
Other steps
You might find it necessary to complete the IRS Form 14039, Identity Theft Affidavit, which can also be used if you suspect identity theft that might have occurred in other areas of your personal affairs. You’ll also need to verify your identity, and for this task, the IRS has another form in the shape of the Letter 5071C or 6331C.
If you’d prefer to talk to someone about it, there should be a toll-free IRS Identity Verification telephone number in the 5071C or 6331C letter. While you’re on the phone, it’s a good idea to make contacting one of the three major credit reporting agencies your next step. These are Experian, Equifax, and TransUnion, and they request a fraud alert. Doing it with one will mean they have to notify the others. Finally, get the suspected fraud issue filed with the FTC at IdentityTheft.gov.
Filing time
Of course, there’s no escaping the fact that you’ll still be required to file your tax return, so you’ll still want to ensure this is done on time. Even if the IRS works on your case, you must submit your paperwork. If you can’t e-file because the IRS system tells you you’ve already done that, then the conventional paper route is another angle. So, please print it out and send it off before the deadline.
If you’ve been prudent and sent off your tax return quite early, you’ll probably get that letter from the IRS informing you of multiple returns filed in your name. Most likely, your Social Security number was stolen by fraudsters. You’ll need to contact the IRS via the methods outlined above to confirm your identity, following the verification process requested by the Revenue Service.
Refund delay?
The final question in this turmoil is, will your tax refund be delayed due to tax-related identity theft? You’ll undoubtedly need to be patient as the IRS has to deal with many cases. Based on data from the IRS Taxpayer Advocate Service, a resolution can take up to and sometimes over three months.
Contacting them can be a good option if you’re having trouble resolving the issue of identity theft. In addition, the Taxpayer Advocate Service can often be useful for helping with ongoing identity theft issues and other tax-related problems. Even more helpful, this is a free service, which might prove handy if you’re suffering hardship as a knock-on result of any fraud that may have taken place.
Be patient
While it's reasonable to expect and hope for the quick resolution of any tax-related fraud affecting you, things will take time. The IRS first has to make a lot of checks; you then have to verify your identity, either by phone or in person, by visiting an IRS office after the revenue service has sent you a letter. Remember that this will come in the mail, so any unsolicited emails or phone calls could be another knock-on effect of fraud.
You'll need to contact the IRS to ensure the wheels start turning into any inquiry. If you don't take action from your side, the case will be on hold. Acting as quickly as possible while giving the IRS everything they need to progress – through the correct channels – is the way to go. Even then, if you've had to file manually, then expect the issuing of any refund to take longer than usual.
You should get your refund, but unfortunately, another side-effect of tax-related identity theft is that more time gets added to the process overall. Sure, it's tedious, but until fraud is even harder to execute by criminals, this is one of those annoying facts of life. Taking adequate measures to reduce your exposure to potential identity theft in the first place is, therefore, a practical way forward.
- Check out our roundup of the best identity theft protection
More from TechRadar Pro
- Check out the best identity theft protection
- The best tax software around today
- Take a look at the best accounting software
