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 although the IRS has improved its detection procedures and reduced the damage somewhat.  Unfortunately for many legitimate taxpayers the fraud filters used by the IRS to determine whether an income tax return is legitimate have  falsely snared legitimate taxpayers two-thirds of the time, according to Nina Olson of the Office of the Taxpayer Advocate, a federal agency that helps taxpayers with IRS problems.  When an income tax return has been recognized as questionable, the IRS will contact the filer with one of four letters with instructions as to how the taxpayer can resolve the problem.  In some instances, the problem can be settled by calling the IRS or online, however, other in other instances, the taxpayer will be required to go in person to an IRS Taxpayer Assistance Center to correct the situation.  Each of the four types of letters indicates what specific documentation you need to provide, such as W-2s and 1099s.  When responding online or over the phone to receiving one of the four letters, you will be asked some personal questions to verify your identity.  Some legitimate taxpayers have found that they did not remember the answers to some of these questions posed by the IRS, such as questions about a car loan from years earlier.  If you cannot provide the correct answer, you will be required to go to one of the IRS Taxpayer Assistance Centers in person to settle the matter.    Even after you have confirmed that your income tax return was legitimate, it is taking the IRS up to nine more weeks for you to get your refund.

Here are links to the four types of letters presently being sent by the IRS:

https://www.irs.gov/individuals/understanding-your-letter-5747c        This letter is sent to people who must go to an IRS Taxpayer Assistance Center to confirm their identity.  The letter also indicates what documentation you must bring.

https://www.irs.gov/individuals/understanding-your-4883c-letter      This letter is sent to people eligible to resolve the matter over the phone.  This letter also indicates what documentation you must be able to access during the phone call to confirm your identity.

https://www.irs.gov/individuals/understanding-your-letter-5447c       People receiving this letter have the option to confirm their identity by phone or by regular mail.  It again indicates what supporting documentation you must provide.

https://www.irs.gov/individuals/understanding-your-5071c-letter        People receiving this letter may confirm their identity either online or over the phone.  This letter also indicates the supporting documentation you must provide.

TIPS

Understandably, the IRS does not indicate what it was about your particular income tax return that triggered suspicion that it may not be legitimate so there is nothing in particular you can do to lessen your chances of having to go through the procedures to confirm that your income tax return is legitimate.  As always, the best things you can do to protect yourself from income tax identity theft are to protect the privacy of your Social Security number as best you can and file as early as possible.  It is impossible for an income tax identity thief to get a refund using your Social Security number for his or her phony tax return if you file first.

It is extremely important to remember that identity thieves will be taking advantage of confusion about the IRS’ program for confirming your identity by calling you, texting you and emailing you posing as the IRS and asking for personal information to confirm your income tax return as legitimate, however, if you provide the requested information in response to such an email. text message or phone call, you will be turning this information over to a criminal who will use it to make you a victim of identity theft.  Remember, the IRS will not be contacting you by text message, email or phone to confirm your identity.  They will only be contacting you by one of the four letters indicated above.

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