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04/04/2014

Identity Theft and Your Taxes

This year’s tax preparation season is being used as a lure for several identity theft-related tax scams.  Now, even the Taxpayer Advocate Service (TAS) name is being used to try to lure unsuspecting taxpayers into a phishing scam.

New information has been released about this scam and the signs to watch out for concerning your taxes that may indicate you are an identity theft victim. Identity-theft

Latest Tax-Related Scam

TAS provides taxpayers with an opportunity to bring their concerns about tax matters to the IRS.  The service has a new warning about an email scam with false claims about your income taxes.  It contains a link to a fraudulent website seeking your personal information and income details.

The email looks official because it uses the TAS logo and style.  The text of the email says:

“Your reported 2013 income is flagged for review due to a document processing error.  Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance.  To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”

Then, it includes a link to false contact information for an assigned “advocate” as well as a fake case number.  It also requests your personal information—and that should alert you that it is a scam.  It is similar to the type of email scam that is using the IRS logo and information.  Some of the emails also offer a computer program to download that is simply a way of installing spyware into your computer to collect your personal data.

If you receive any kind of email claiming it is from the IRS or TAS or any taxing authority, know that it is a scam.  You should immediately forward the email to the IRS address that handles scams:  phishing@irs.gov. Then you should continually check your credit report to see if any of your accounts have been tampered with.   If you are a victim, you must go through a tedious reporting process to alert the police, lenders and credit agencies as you seek legal help.  Click here for an online ID Theft Tool Kit.

Identity theft with a tax-twist is on the rise as more scammers use official looking emails and fraudulent sender addresses to lure victims.   It can take months, even years, to clear damage done to a victim’s finances and credit report as well as their good name.  Victims can lose opportunities to secure loans and can even be charged with crimes they didn’t commit.  Identity theft is now the number one cause of consumer fraud complaints in America.

Identity Theft and Your Tax Return

Sometimes an identity thief will use your social security number to get a job.  The income is reported to the IRS by their unsuspecting employer, but because you don’t know about it, the income taxes owed are not paid.  Then the IRS audits you requiring you pay the taxes and related penalties. The person who was working the job may be collecting income without paying taxes for years before the IRS catches the discrepancy.

In a previous blog, Tech Savvy Tax Scams, we detailed how scammers may use your social security number and other personal information to file fake tax returns to receive refunds.  Then when you file your legitimate return, the IRS sees that a return has already been filed and will investigate you for fraud.

Be alert that you may have been the victim of identity theft if you receive an official (real) letter from the IRS stating you have either filed more than one tax return or you have received wages from an employer that you did not claim.  If you receive this kind of IRS notice, contact the IRS immediately with the phone number provided on the letter and don’t forget to call your tax preparer.

Remember, the IRS, TAS and other official government taxing authorities do not make first contact with taxpayers by email.  They also never request personal information to be submitted by email.

Identity thieves are growing more sophisticated and they are equipped with the latest technology.  Be aware of the scams, be cautious with sharing your personal information (particularly your social security number) and be mindful that should you be an identity theft victim, the sooner you begin steps to resolving issues, the better.

For more information about how identity theft may affect your taxes, contact us at McRuer CPAs.

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