It was only a few days ago on January 28th that the filing season for federal income taxes began and, once again, we can expect income tax identity thieves to be among the first people filing returns. Income tax identity theft, by which identity thieves file phony income tax returns with counterfeit W-2s using the Social Security numbers and names of their victims is still a major problem for the IRS and taxpayers costing us all billions of dollars each year. However, when someone has stolen your Social Security number and filed an income tax return using your name, the problem becomes particularly personal.
Regardless of how careful you are about protecting the privacy and security of your Social Security number, the many data breaches that have occurred in recent years have made the Social Security numbers of many millions of us available for purchase by criminals on the Dark Web, that part of the Internet where criminals buy and sell goods and services. In an effort to fight income tax identity theft, bi-partisan legislation has been filed in the senate by Maine Senator Susan Collins and Alabama Senator Doug Jones that would expand the IRS’ Identity Protection PIN program to include everyone. Presently only taxpayers in Florida, Georgia and the District of Columbia are able to request and obtain a special IP PIN, which is a six digit number issued by the IRS to be included on a tax return in order for it to be processed. The pilot program in these two states and the District of Columbia appears to be effective. The new legislation entitled the Taxpayer Identity Protection Act would expand the availability of the IP PIN to all taxpayers who wanted to obtain one.
This proposed legislation will take a long time to be passed and even once passed will be phased in. So for now, if you live in one of the three jurisdictions where you are able to obtain an IP PIN, I urge you to do so. As for the rest of us, along with protecting the privacy of your Social Security number as much as possible, the best thing you can do to protect yourself from income tax identity theft is to file your income tax return as soon as possible in order to make sure your return is filed prior to that of an identity thief. Income tax identity theft only works if the identity thief files a tax return before you do.
If you do become a victim of income tax identity theft, you should file a Form 14039 electronically. You can obtain the form at the FTC’s www.Identitytheft.gov website where you will be asked questions necessary to automatically complete the form. Once the form is completed, you will be able to review it and, if it meets with your approval, submit the form directly to the IRS through the www.Identitytheft.gov website. You should also download and print out a copy of the form for your own records as well. You should receive a confirmation from the IRS of receipt of the form within thirty days. You also should file a police report immediately
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