dealing with IRS identity theft

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brogrammer
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Joined: Mon Aug 15, 2011 1:56 am

dealing with IRS identity theft

Post by brogrammer »

I filed my tax return in mid-February and still haven't gotten my refund, nearly four months later. I had overpaid by $5k to get an I-Bond, which is why I am due a refund and why I have been checking every now and then wondering where it is.

Despite the the admonition on the IRS website to not call them unless the website instructs you to do so, I called them yesterday to seek more info, and was told that another return had been filed with my SSN which was the cause of the delay. I'm a little irritated that they never sent me a letter or tried to communicate with me about this -- I filed first and my e-filed return was accepted. But whatever. My next course of action is to file an affidavit with them, and allegedly they will process it within 90 days and release my refund.

Has anyone else gone through this, and what was the amount of time required to get it resolved? And what's going to happen next year when I go to file?

Also, what are opinions about other courses of action to take? The IRS telephone rep suggested I file a report with the FTC, SSA, and local police, and freeze my credit reports. I will definitely check my credit reports, but I am not sure I see the value in going crazy telling the world that I'm a victim of identity theft since I don't really have any information as to what happened, nor do I have any evidence that anyone even has my identity. All I know is that IRS is holding on to my refund (and that I'll probably get a check and not even get my I-Bonds now; sigh) because someone used my SSN to file a tax return. I don't even know if the alleged identity thief knows my name.
livesoft
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Re: dealing with IRS identity theft

Post by livesoft »

I have not filed for 2011, so I do not know if this has happened to me yet, but it apparently is very, very common according to this NYTimes articles from the end of May:
http://www.nytimes.com/2012/05/27/us/id ... often.html
http://bucks.blogs.nytimes.com/2012/05/ ... ity-theft/
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ProfessorX
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Re: dealing with IRS identity theft

Post by ProfessorX »

That is totally awful.
campy2010
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Re: dealing with IRS identity theft

Post by campy2010 »

I have been against the overpaying taxes for Ibonds for just this reason, and I am glad you posted about this and hope others take notice. Always aim for a $0 refund. The IRS apparently has few controls over fraudsters randomly filing tax returns with stolen or randomly selected SSN. Like Livesoft said, it is becoming a huge problem and I really feel awful that you have to deal with this. According to these articles, the IRS eventually straightens things out but it may take about a year.

That said, I think this is by definition identity theft, even if you're not certain that the thieves have all of your information. I would file with the suggested groups, particularly the local police. If nothing else, to bring the issue to the attention of those who have an ability to deal with the problem. I would add that you should write a letter or make a call to your congresspeople because this issue also needs to be on their radar as well.
Last edited by campy2010 on Sat Jun 16, 2012 12:29 pm, edited 1 time in total.
Carl53
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Re: dealing with IRS identity theft

Post by Carl53 »

Until the SS numbers are used only for SS purposes, then this type of fraud will prevail. It is a little mind boggling that the IRS accepts returns without question that have the correct SS number and name, but nothing else is matched against computerized records like 1099s, W2s etc. I cannot believe that they would not confirm information like this, so I can only presume that these are using income claimed from other than documented sources. If this is the case, I would think that it be simple to automatically place a hold on these returns. Likewise for those that have new SS numbers (ones for which no tax returns filed last year) or for returns that have a certain % of 1099s, W2s and other documentation that differs from last years tax return, until further confirmation could be made.
chaz
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Re: dealing with IRS identity theft

Post by chaz »

Might be an innocent error in typing a number.
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GregLee
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Re: dealing with IRS identity theft

Post by GregLee »

I have never gotten a refund from the IRS and will never get one. I always owe more tax than I've paid. I wonder if I'm still vulnerable to this sort of theft.
Greg, retired 8/10.
Mudpuppy
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Re: dealing with IRS identity theft

Post by Mudpuppy »

GregLee wrote:I have never gotten a refund from the IRS and will never get one. I always owe more tax than I've paid. I wonder if I'm still vulnerable to this sort of theft.
They could still file a fraudulent return in your name claiming a refund (since the IRS does not verify W2s and so forth, as previously mentioned). It wouldn't fiscally impact you much since you aren't expecting a refund, but it could be a headache.
pshonore
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Re: dealing with IRS identity theft

Post by pshonore »

Carl53 wrote:Until the SS numbers are used only for SS purposes, then this type of fraud will prevail. It is a little mind boggling that the IRS accepts returns without question that have the correct SS number and name, but nothing else is matched against computerized records like 1099s, W2s etc. I cannot believe that they would not confirm information like this, so I can only presume that these are using income claimed from other than documented sources. If this is the case, I would think that it be simple to automatically place a hold on these returns. Likewise for those that have new SS numbers (ones for which no tax returns filed last year) or for returns that have a certain % of 1099s, W2s and other documentation that differs from last years tax return, until further confirmation could be made.
The IRS generally accepts e-filed returns around Jan 15 of each year. W2 forms can be mailed as late as Jan 31 and 1099 forms later than that. Many small employers still use snail mail to mail paper W2 froms and 1099 Forms to the IRS. As long as that is allowed to continue, it would quite difficult to match that stuff on a timely basis. (There's a reason why it takes the IRS at least a year to send CP 2000 letters for missing W2/1099 forms etc). And what about people who switch jobs, retire, etc? I suppose an IRS supplied PIN for previous filers might work, but how does the IRS comunicate the PIN to filers and what happens if its lost, not forwarded, etc?

As I understand it, most of the bogus refunds go to pre-paid debit cards. Perhaps the IRS should do something in that area make it more difficult to get the bogus refund because I doubt these are going into "identifiable" bank accounts via direct deposit.
MarkNYC
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Re: dealing with IRS identity theft

Post by MarkNYC »

brogrammer wrote:I .. was told that another return had been filed with my SSN which was the cause of the delay...I filed first and my e-filed return was accepted. My next course of action is to file an affidavit with them, and allegedly they will process it within 90 days and release my refund.
...what's going to happen next year when I go to file?
After the IRS receives and processes your identity theft affidavit, then next year you will likely receive from the IRS in January a letter providing you with a 6 digit Identity Protecton PIN, which must be entered on your 2012 tax return on the bottom right of page 2 of the 1040, on the line next to the "spouse's occupation" box. This IPPIN will allow the IRS to process your 2012 return and any associated refund without any unnecessary delay. I believe you will receive a new and different IPPIN for at least each of the next 3 years. Failure to list the IPPIN on your return will cause a rejection of an efiled return, the return must be paper-filed, and any refund will likely be delayed.
Topic Author
brogrammer
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Re: dealing with IRS identity theft

Post by brogrammer »

MarkNYC wrote:a 6 digit Identity Protecton PIN, which must be entered on your 2012 tax return ... you will receive a new and different IPPIN for at least each of the next 3 years.
Thanks so much, I wish the agent on the phone could have offered such detailed information. I'll resurrect this thread from the dead in six... or twelve... or more months when it all gets resolved. :)

And good idea campy2010, I think I will write my congressman. The banks manage to use their plethora of data to do pretty decent fraud detection; it is weak that the IRS cannot do the same. I doubt it will do much good, but maybe if the tide of complaints keeps increasing, something will get done.
Topic Author
brogrammer
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Re: dealing with IRS identity theft

Post by brogrammer »

Just an update in case anyone is curious, and as I pass the six month anniversary since filing my taxes. No resolution yet. I am in the process of buying a home and this is causing great fun with the lender, because my 2011 IRS transcript does not match the 1040 I gave them. I did learn from the transcript they ordered that this isn't an honest mistake but is "real" identity theft; the bogus return (which was the only one listed on the transcript for 2011) was using my 2002 mailing address -- so someone did indeed have my name, SSN, and an old address, and filed saying that they had a $4000+ refund coming to them.

I called the IRS identity theft special unit yesterday to see if they got my affidavit (yes), and learned two things:

- The 4506T form for transcripts recently gained an identity theft check box which will return more transcript info to the lender (hopefully including my real return in addition to the bogus one). I didn't see it when I signed my first 4506T.

- They are so backlogged with ID theft claims that the estimate it will be 204 days from the time of my first report before they make a decision whether to assign a case worker and decide how hard the case will be to solve. This is up from the original estimate of 90-120 days. Actual time to final resolution is not specified.

:(
Grasshopper
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Re: dealing with IRS identity theft

Post by Grasshopper »

Thanks for sharing.
Ping Pong
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Re: dealing with IRS identity theft

Post by Ping Pong »

The same thing happened to me. The IRS received two returns even though I only mailed one. They never notified me of the discrepancy. I only found out after calling them the 3rd time to find out about my much delayed refund. Each time I called, they said something like "Oh it hasn't been processed yet, why don't you call back when 6 months have passed" I only found out about the identify theft when I called the 3rd time and the CSR rep said "are you talking about the first one you filed or the second one?" They still don't know how long it will take to process, and they never notified me that I need to fill out an affidavit like they did for you. So I've been waiting all this time for my 2010 refund. I'm assuming they haven't processed my 2011 refund because they're waiting for my 2010 to process. They did give me the phone numbers for SSA, Equifax, FTC, etc, but like you, I didn't see much point in notifying everyone. Maybe I should call them and ask about the affidavit, I wonder if that will speed things up.
rkhusky
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Re: dealing with IRS identity theft

Post by rkhusky »

Yet another reason to arrange things so that one does not get a refund.
btenny
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Re: dealing with IRS identity theft

Post by btenny »

How did the thieves know how much income and taxes to claim and how much to ask for in the refund? I don't understand how this works. Or do you even understand what was filed on the fraudelent return? Please explain more if possible.

Bill
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damjam
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Re: dealing with IRS identity theft

Post by damjam »

btenny wrote:How did the thieves know how much income and taxes to claim and how much to ask for in the refund? I don't understand how this works. Or do you even understand what was filed on the fraudelent return? Please explain more if possible.

Bill
The thieves don't need to know the specifics of your finances, all they need is your name and SS#.
I watched a committee hearing on C-Span with the head of the IRS. He said refunds are sent out before all of the matching information is available. For example you can file for a refund in early January even though the IRS doesn't receive your W-2 and 1099 information until early February. He said one way to solve this would be to delay processing of returns and thus delay delivery of refunds.
Carl53
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Re: dealing with IRS identity theft

Post by Carl53 »

damjam wrote:The thieves don't need to know the specifics of your finances, all they need is your name and SS#.
I watched a committee hearing on C-Span with the head of the IRS. He said refunds are sent out before all of the matching information is available. For example you can file for a refund in early January even though the IRS doesn't receive your W-2 and 1099 information until early February. He said one way to solve this would be to delay processing of returns and thus delay delivery of refunds.
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SimonJester
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Re: dealing with IRS identity theft

Post by SimonJester »

damjam wrote:
btenny wrote:How did the thieves know how much income and taxes to claim and how much to ask for in the refund? I don't understand how this works. Or do you even understand what was filed on the fraudelent return? Please explain more if possible.

Bill
The thieves don't need to know the specifics of your finances, all they need is your name and SS#.
You don't have to be alive either, last year a family member passed away, that next February the surviving spouse filed the last joint tax return, a month or two goes by no refund. It turns out that someone had filed a false return with the deceased family member's ssn and name claiming head of household, 14 dependents, and about $5,000 in refunded EIC...

One would think the IRS could check the Social Security Death Master File to prevent this...

It is interesting to know that within a week or so of your reported death to social security, your SSN will be available to the world to exploit...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
avmax8
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Re: dealing with IRS identity theft

Post by avmax8 »

brogrammer wrote:Just an update in case anyone is curious, and as I pass the six month anniversary since filing my taxes. No resolution yet. I am in the process of buying a home and this is causing great fun with the lender, because my 2011 IRS transcript does not match the 1040 I gave them. I did learn from the transcript they ordered that this isn't an honest mistake but is "real" identity theft; the bogus return (which was the only one listed on the transcript for 2011) was using my 2002 mailing address -- so someone did indeed have my name, SSN, and an old address, and filed saying that they had a $4000+ refund coming to them.

I called the IRS identity theft special unit yesterday to see if they got my affidavit (yes), and learned two things:

- The 4506T form for transcripts recently gained an identity theft check box which will return more transcript info to the lender (hopefully including my real return in addition to the bogus one). I didn't see it when I signed my first 4506T.

- They are so backlogged with ID theft claims that the estimate it will be 204 days from the time of my first report before they make a decision whether to assign a case worker and decide how hard the case will be to solve. This is up from the original estimate of 90-120 days. Actual time to final resolution is not specified.

:(
I experienced nearly the exact same scenario as you earlier this year. I had alerted the IRS to the fraud last year but discovered when I applied for a refi this year that there had been no resolution to the case and that the "official" IRS transcripts reflected the fraudulent returns. My recommendation is to contact the Taxpayer Advocate Office within the IRS. http://www.irs.gov/advocate/ They will assign you a personal advocate who will research your case and be responsible for resolving the issue within the IRS. They also can speak directly with your lender and provide any documentation necessary to support your case. I was very pleased to have one person within the IRS who was familiar with my case and who was available to speak with me whenever I needed them. My case was resolved within approximately 3 months, start to finish. One of the more valuable IRS services, IMO.
Topic Author
brogrammer
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Re: dealing with IRS identity theft

Post by brogrammer »

After nearly ten months after I originally filed, this is finally resolved.

I called back around Thanksgiving asking for a status update, and the representative told me that he would escalate my case as it had been outstanding for too long, and that someone would contact me within ten business days.

I didn't hear from anybody, but this week I did get a refund check in the mail, followed by two letters, one saying that they had deleted the fraudulent return from my account, and one telling me that I would get an IP PIN by mail to file with for protection. So all's well that ends well. At least I made 2% or so of interest on the refund (do I have to pay taxes on that? :happy). Suffice to say, I will not be overpaying this year to try to get I Bonds.
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grabiner
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Re: dealing with IRS identity theft

Post by grabiner »

brogrammer wrote:At least I made 2% or so of interest on the refund (do I have to pay taxes on that?)
Yes, federal tax, and probably most states. (It depends on exactly how your state defines a US government obligation, but I believe most states exempt only interest on US government bonds, not other interest from the US government.)
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