Tax identity theft occurs whenever someone fraudulently uses your personal information for tax purposes. There are several types of tax identity theft, but two main reasons that identity thieves steal your information:
- To file a return on your behalf and receive a fraudulent refund
- To use your information to get employment and receive wages
Either of these situations can cause serious tax identity theft problems. You may find out about each type of identity theft in different ways and take different steps to resolve your issues.
Fraudulent Tax Refunds
If someone else uses your Social Security Number (SSN) to file a tax return, your return will be rejected if you try to e-file. This is often the way that taxpayers discover they are victims of tax identity theft.
You’ll need to submit a paper return by mail, along with an IRS Identity Theft Affidavit. You can also work with a tax identity theft attorney to sort out your issues with the IRS.
Sometimes, the IRS may contact you if a suspicious return is filed using your SSN. You will receive a notice by mail informing you of the return.
In these cases, you’ll need to follow several steps to confirm your identity. You can then tell the IRS whether or not you filed the return in question.
Fraudulent W-2s or Income
Identity thieves may use your SSN to get employment and receive wages. When this happens, the IRS will receive a copy of the W-2 or 1099.
The IRS may adjust your return or assess tax against you because of these fraudulent tax documents. If it takes you a while to discover the problem, the IRS may even begin enforced collection and try to levy your wages or bank accounts.
The IRS should stop collection activity if the tax liability was improperly assessed due to identity theft. However, they may not know that the tax liability is improper unless you respond to the IRS notices.
A tax attorney can help you stop IRS collection activity, inform the IRS of the identity theft, and get the fraudulent documents removed from your account. This process can move slowly, so be patient.
If you’ve been the victim of tax identity theft, consult with a tax attorney to determine the best course of action.
The Gartzman Law Firm can help you with tax identity theft and other IRS tax problems. Use our contact form to request a consultation with an Atlanta tax resolution attorney.