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MEMBER BLOG: The Latest Scam – Filing Bogus Tax Returns in Your Name

Mike GaninoApril 13, 2015

PKF O'Connor Davies

The Latest Scam – Filing Bogus Tax Returns in Your Name

You’ve compiled your paperwork, receipts, met with your tax preparer and reviewed every important detail. Your tax returns are completed, signed and e-filed. Whew!  Done for another year, right? Wrong! The IRS or State rejects your return as a “duplicate” because either yours or your spouse’s Social Security number has already been used to file a return – and your refund has been issued...to someone else. Really? You’ve just been victimized by the latest identity theft scheme. Now what?

Though it’s of little comfort, the Federal Trade Commission (FTC) has identified tax-related identity theft as a top source of identity theft complaints. According to the IRS, and a recent article in USA Today, con artists can use your stolen Social Security number and file a false income tax return and while it may not be what your ultimate refund actually is, it could be deposited to an account the scamster controls.  Unfortunately, you may be unaware of this until you file your own tax return.  

So, what do you do now? The IRS (http://www.irs.gov/individuals/identity-protection) and the FTC (http://www.consumers.ftc.gov/feature-0014-identity-theft) websites are a great starting place. The following, taken from the FTC and IRS websites, is a “quick look” at actions to protect yourself and begin the repair process

1.  File a police report with local law enforcement.

2.  File a complaint with the FTC at www.identitytheft.gov or via the FTC Identity Theft Hotline at 1-877-438-4338.

3.  Contact one of the three major credit bureaus to place a “Fraud Alert” on your credit records. (The one you select will inform the           other two companies.) This will make it more difficult for identity thieves to open unauthorized accounts in the future. The alert lasts 90 days, but can be renewed.

  1.     Equifax – www.equifax.com; 1-800-525-6285
  2.     Experian – www.experian.com; 1-888-397-3742
  3.     TransUnion – www.TransUnion.com; 1-800-680-7289

4.  Close any financial accounts affected.

5.  Respond to all IRS notices.

6.  File IRS Form #14039, Identity Theft Affidavit (available on the IRS website.)

7.  File your tax return, most likely using a paper filing option.

8.  Order and review your credit reports (see contact information at #3.)

Going Forward – Repairing the Damage and Reducing the Risk of Recurrence

Extended Fraud Alert - This alert lasts up to seven years and is free for those who have been or believe they have been victims of identity theft. Once placed, it allows you to get two free credit reports within a 12 month period from each of the three national credit reporting bureaus. In addition, your name is taken off of the marketing lists for prescreened credit offers for five years.

Credit Freeze – This will stop ALL access to your credit report without your express authorization. You can continue to do things such as applying for a job, renting an apartment or anything that requires your credit report. If you want a potential employer, landlord or lender to be able to review your account, you must ask the credit reporting company to lift the freeze either temporarily or permanently. The process and cost to place or lift a Credit Freeze, or how long the freeze lasts, vary from state to state. 

One final but important thought…

Do NOT give any personal information to anyone saying they represent the IRS on the phone or via email. The IRS does NOT use social media, e-mails or phone calls for requests of information or for collections.

If you encounter any situation that seems beyond your control, contact your tax professional and they will guide you.

Mike Ganino is a Principal at Dworken, Hillman, LaMorte & Sterczala, P.C.

DHL&S is a full service Certified Public Accounting and Business Consulting firm located in Shelton, Connecticut, and is a proud BRBC member.

Visit Dworken, Hillman, LaMorte & Sterczala, P.Cwebsite or email Mike Ganino via this link to BRBC Business Directory.        

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