Rogue Preparers Steal Identities, File Returns

(Memphis) Tax season just got started and so did the crooks.

The On Your Side Investigators have already received numerous calls and complaints about local preparers filing returns without a client’s permission.

Avoiding Tax Identity Theft

While most folks have their identities stolen outside of tax time, it’s also not uncommon to happen during filing season.

Here’s how it typically works.

Tax preparers will open up in December and offer “holiday loans” or other products geared toward cash strapped consumers.

Experts say the loans themselves are bad products because they often come with high fees and a lack of disclosure.

Consumers will hand over personal information to determine if they “qualify” for a loan.

Regardless of whether they take out a loan, consumers walk away and later discover a tax return was filed in their name.

The taxpayer is unaware until he/she attempts to file on their own.

Steps to Take if Your Identity is Stolen/Return Filed in Your Name

Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490.

You will also have to fill out an ID Theft Affidavit, or Form 14039.

Submit the completed form along with a clear and legible photocopy of at least one of the following documents to verify your identity:

Check the box next to the document(s) you are submitting:

  • Passport
  • Driver’s license
  • Social Security Card
  • Other valid U.S. Federal or State government issued identification**
  • Do not submit photocopies of federally issued identification where prohibited by 18 U.S.C. 701 (e.g., official badges designating federal employment).

Tennessee residents would file the affidavit to:

Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999-0002

Mississippi residents would file the affidavit to:

Department of the Treasury
Internal Revenue Service
Austin, TX  73301-0002

Arkansas residents would file the affidavit to:

Department of the Treasury
Internal Revenue Service
Fresno, CA 93888-0002

**Note, according to the IRS, residents must mail forms to the location currently processing returns for that state.  This may not be the same as your state of residence!

Indications Your Identity Has Been Stolen

  • If you receive a letter from the IRS stating or learn from a tax professional that you filed more than one tax return or someone has already filed using your information.
  • You have a balance due, refund offset or have had collection actions taken against you for a year you did not file.
  • You received wages from an employer you have not worked for.

The IRS has added more filters to catch fraudulent returns.  Victims of identity theft are assigned a special number, called an Identity Protection PIN, to use when filing their federal return.

However, it’s critical for all taxpayers to guard their personal information.  In fact, when shopping for a preparer, don’t give out personal information until you’re positive you’re using that company, and have done thorough research on their business.

Tips for Avoiding Tax ID Theft

  • Protect your personal information
  • Don’t carry social security cards around
  • Don’t give out financial information online or over the phone
  • Ignore calls from people claiming to be from the IRS and asking for immediate payments
  • Get a free copy of your credit report every 12 months at www.annualcreditreport.com