If someone steals your Social Security Number and uses it to obtain employment, the IRS may believe you actually earned that income. This can cause tax debt problems and may eventually result in IRS collection actions, such as bank levies.
You will need to inform the IRS of the identity theft, make sure all fraudulent documents are removed from your account, and have all collection activity against you stopped or released.
You’re better off catching a case of tax identity theft early on. This is one reason to read and respond to every notice you receive in the mail from the IRS.
If you get a Notice of Deficiency or any other IRS notice, read it carefully. If it refers to a W-2 for a job you don’t have, it could be an indication of identity theft.
If you don’t respond, the IRS may move forward with collection actions and you’ll have to work even harder to protect your property and resolve your tax debt issues.
The IRS should release all levies caused by tax identity theft. You may need to provide proof of your identity and other evidence showing that identity theft has occurred. The IRS may also contact the employer and request information to prove the true identity of the employee.
However, identity theft can lead to many other consequences. It may take some time for the IRS to correct all of the issues relating to your account, such as:
- You may not have received a tax refund because the identity theft caused a tax liability on your account.
- A tax refund for another year may have been offset.
- A Notice of Federal Tax Lien may have been filed against you.
- If you had an existing installment agreement with the IRS, your agreement may have been terminated due to the fraudulent tax liability.
A tax attorney can help you sort out these issues. Your first priority is to stop any impending collection actions, such as bank account levies or wage garnishments.
After that, you can provide the IRS with the information they need to resolve your identity theft case. This can take a year or more, but eventually you should be able to have all the fraudulent activity removed from your account and undo all the damage done by the identity theft.
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.