It is tax time again. We want to remind you to watch out for thieves trying to steal your tax refund. More and more Americans are finding that someone has taken over their identity to file a fraudulent tax return in their name and collect the refund check. In a recent year,1.6 million taxpayers were hit by tax identity theft according to the Treasury Inspector General for Tax Administration.
Obviously, the best advice is to prepare and file your tax returns as soon as your employer gives you the W-2 form. This way you will beat the thieves to the punch!
If someone does steal your tax refund by filing a false tax return, you can get help. Time magazine recently published a checklist of what you should do:
1. Report The Fraud Quickly
Call the IRS Identity Protection Specialized Unit right away so that they can begin the process of verifying your information:
IRS Hotline: 800-908-4490
Your state tax return could have been filed falsely as well. Contact your state’s hotline:
New York: 518.457.0578
New Jersey: 609.292.6490
2. Gather Your Proof
“When you call the IRS about the ID theft, have old copies of your tax returns from the past two or three years out. It will move your case faster,” says Valrie Chambers, a CPA and Stetson University accounting professor. By providing additional information that the IRS can check against, you strengthen your case that your return is the legitimate one.
3. Pick Up More Protection
Once you report the fraud and fill out the affidavit, the IRS should issue you a personal identification number to provide another layer of security. You’ll need to submit this PIN along with your Social Security Number when you file any tax form going forward so that the IRS knows to carefully check over your account.
4. Alert The Credit Bureaus
“If a thief had enough information about you to file a false tax return, he could have also opened new credit card accounts or taken out a loan in your name,” says CPA Troy Lewis, chairman of the American Institute of CPAs’ tax executive committee.
5. Be Patient
The IRS says a typical case of ID theft can take 180 days to resolve.
We hope you are finding our consumer alerts useful. And, as always, if you know someone who is struggling with overdue debts, please have them call us for a bankruptcy consultation at 212-315-3755.