13 April 2016
I read about it all the time and I have made several Facebook posts about it this tax season, but identity theft got personal for us this year. Our tax return could not be e-filed with the IRS because Tade’s social security number had already been used by someone else. Someone stole her social security number and filed a tax return in her name, which blocks us from being able to file our return electronically.
It’s strange when it happens. I do our own taxes, of course, so I was the first person to see the rejection notice from the IRS stating that her social security number had already been used. My first reaction was equal parts shock and outrage – HOW DARE SOMEONE DO THIS! That first reaction hasn’t changed much over the last week or so since it happened. It has transformed a bit into fear there could be additional damage, but the anger remains. I’d like to find and throttle the criminal who did this.
Back in olden times criminals were placed in stocks in the town square and passing citizens could hurl rotten vegetables at them. Could we bring that back for situations like this? It seems like an appropriate way to punish menaces who prey upon the public. I’m not a mean guy, but I’d love a shot at this clown. I could work on my fast ball with a bushel of wormy old tomatoes while simultaneously discouraging a scoundrel from further d-baggery. Seems like a win-win to me. (Can you tell I’ve been thinking about this for a while?)
Sadly, I hold out little hope this jackwagon will ever be found. Cyber thieves are very hard to track down.
We can’t let that stop us from taking action, however. There are things to be done to get our taxes completed, protect our future tax filings, and prevent any further damage to our credit and finances. Let me outline the steps to take when you are the victim of a fraudulent tax return filed in your name.
Step 1. Tell the IRS
Our tax return was rejected within 20 minutes of being filed. The IRS computer took a look at the social security numbers on our return and compared them with the SSNs on tax returns already filed. As soon as the computer found a match our return was rejected. That doesn’t mean the IRS knows our return was the correct one and the one they already have is the fake one. We know it, but the IRS doesn’t. We have to tell them. (We also still need to file our taxes!)
Generally, you ‘tell’ the IRS by mailing them a paper copy of your tax return. Include with it a form 14039 Identity Theft Affidavit. There is space on the form to tell the IRS what happened that alerted you to the fact that your identity was used by someone else to commit tax fraud. You will also need to include a photocopy of your ID to prove that you are who you say you are. Instructions for including your ID are spelled out on the form.
Filing form 14039 tells the IRS your identity was stolen and your SSN was compromised. This puts you in the IRS’s database as requiring a separate PIN in order to file your taxes. The IRS currently issues these in December. You will get your PIN in the mail, and YOU MUST HAVE IT in order to file your taxes electronically next year. Don’t lose it!
Depending on how and when you filed your taxes you might first discover the identity theft by receiving a 5071C letter from the IRS. This letter informs you the IRS suspects someone may have committed tax fraud using your information and that you need to verify your identity in order for your tax return to be processed. Follow the instructions in the letter.
Step 2. Protecting Yourself from Further Harm
Even after you have things squared away with the IRS you should take additional measures to protect yourself from further harm. A criminal has your personal information. You have no idea what their intent might be, but we already know they are willing to use it to steal tax money from the government. Are you willing to gamble they are just going to stop right there?
You should file a complaint with the Federal Trade Commission (FTC). You can do this online at identitytheft.gov.
You should also contact at least one of the major credit bureaus to put a fraud alert on your records. (Note: The IRS won’t do this for you!) The major credit bureaus are:
Equifax.com
Experian.com
TransUnion.com
Get a copy of your credit report from at least one of the bureaus and review it. They are required to give you one free copy each year. Verify all of the open credit and financial accounts in your name. If you see one you don’t recognize, close it. Especially if it was opened recently.
Step 3. Continue Monitoring
Even if there is no suspicious activity on your credit report you must remain vigilant. Your information is still in the hands of a criminal. They might just be waiting until they think you’ve forgotten about that fact to strike. You will need to stay on top of this for the rest of your life.
The credit reporting agencies have to give you a free report once a year. I have set up a schedule to get a report from a different agency every 4 months; Equifax in February, Experian in June, TransUnion in October. Rinse and repeat each year. That way I get my free report from each of them, and I also have year-round coverage.
Additionally, I use CreditKarma.com to monitor our credit scores. I can check every week (for free) to see if our credit scores have changed. A new account opened in your name would change your credit score, so monitoring it could provide an earlier warning than the 4-month credit report interval. (Hint: you might want to use an e-mail account you don’t mind getting a lot of offers sent to when you register for Credit Karma. It’s free to use, but the helpful offers just keep on coming.)
If you’re able you might want to consider one of the credit monitoring services available. You pay a fee for that service, but any time there is activity in your financial world they will send you an alert. Tade and I signed up for one of these, but I am not overly impressed, so I am not going to recommend them by name. If you’re interested, you can do some research and find one you think is suitable for your needs.
Getting your identity stolen stinks. It really stinks. If it has happened to you then you know exactly what I mean. I hope they catch the guy who did it. If they catch your guy give me a call and I’ll go in 50-50 on the bushel of rotten tomatoes with you.
If you need help with getting your tax situation straightened out with the IRS, give me a call.
