ASK THE EDD LAWYER – THE IRS’ NEW IDENTITY THEFT VICTIM ASSISTANCE PROCESS
By Robert S. Schriebman
On April 4, 2018 the IRS released Fact Sheet 2018-6 explaining its Identity Theft Victim Assistance Process. The Fact Sheet explains the procedures involved for resolving tax related identity theft cases. If you have been the victim of identity theft, and if your tax refund has been stolen, you must complete IRS Form 14039 “Identity Theft Avadavat.” The form is used if you file electronically and learn that your refund claim has been rejected because it has already been given to thieves. There is quite a bit of employee information theft out there. Your Social Security number could have been taken by thieves who processed a phony income tax refund in your name.
Not too long ago, a man walked into a major super market in my community. He represented he was from corporate headquarters and requested a list of all employees, their Social Security numbers, and other vital information. Without checking with headquarters, the store assistant manager turned over several CDs containing this vital information. Needless to say, the assistant manager is no longer assisting anyone in that super market.
Internal IRS Safeguards Are Not Foolproof
The IRS identifies suspicious tax returns based upon hundreds of processing filters and pulls the suspicious return for review. Still, the system is not 100% effective. If a phony return is caught in the IRS system the taxpayer will receive an IRS Letter (Letter 5071C). The letter will ask the taxpayer-victim to use an on-line process to verify his or her identity and to tell the IRS whether or not they truly filed the suspicious return in question.
While the above process may capture a potential phony refund, there may still be taxpayer’s victimized when their refund is turned over to crooks. If a refund claim is rejected, the IRS will issue a special letter (Letter 5747C) and the taxpayer victim will be asked to verify his or her identity at a Taxpayer Assistant Center.
IRS Form 14039
If you are a victim of a phony refund payout, you should go on the IRS Website and complete and file Form 14039 which goes to the Identity Theft Assistance (IDTVA) organization. The form will be handled by IRS specialists. You may be given a special identity protection PIN that will add an extra layer of identity protection. You will then be issued a letter (Letter CP01A) giving you a new PIN number that you are to use in the future when filing your tax return.
Protect Yourself – Get Your Own IRS PIN
Even if you are not yet a victim of IRS identity theft it may not be a question of “if” but more a question “when.” The IRS advises you to complete Form 14039 to obtain your PIN. After you complete the form, the IRS will contact you with instructions on how to obtain your PIN. This may be inconvenient for you, but the IRS warns that the identity theft process is complex and not yet foolproof.
Thomas Jefferson is reported to have said, that the happiest day of life was when he stopped reading the newspaper. There doesn’t seem to be much time between episodes of hacking and the stealing of identity information. Just the other day, the media announced that major department stores in New York had been hacked and vital customer account information was stolen. These crooks are smart, aggressive, and inventive. As I said above, it is not a question of “if, but “when.” One has to stop and ask, “Is cash still king?”
Robert Schriebman has a successful practice in the Rolling Hills Estates area of Los Angeles County serving clients throughout California and the United States. He has successfully dedicated more than 40 years to helping individual taxpayers, business owners, CPAs, Enrolled Agents, and tax attorneys navigate the complicated tax systems of the federal and state governments.
Robert Schriebman has written the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House.
Robert Schriebman has written over 20 books including the major manual used nationally by practitioners and the IRS, “IRS Tax Collection Procedures – A Manual for Practitioners” published by Commerce Clearing House in addition to the only 2 books ever published dealing with how California Employment Development Department (EDD) operates. See “California Tax Collection Practice and Procedures” and “California Taxation Practice and Procedure,” both published by Commerce Clearing House.
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