With identity theft so common, taxpayers are naturally concerned about the security of their information during the filling process. And although the e-filing system itself is secure, identity thieves will often file early the tax return of someone whose identity they’ve stolen, in order to collect the victim’s refund. But tax professionals don’t take identity theft lightly. Here’s what we do to help you, if you experience a theft of this sort.
As Journal of Accountancy explains, all tax preparers are required to receive e-file authorizations to electronically file a tax return. When they request the authorization, they might receive a rejection code 902 with the statement, “Taxpayer TIN [taxpayer identification number] in the return header must not be the same TIN of a previously accepted electronic return for the return type and tax period indicated in the tax return.” This message alerts us to the possibility of a previously-filed, fraudulent return. After double-checking the Social Security number or TIN, we would contact the client to verify that he or she has not filed any paperwork with the IRS at all since last year’s return. At that point, we can see that client may be a victim of identity-theft fraud, so we take action with the IRS to resolve the issue.
We will also file an identity-theft declaration with any state and/or local return that is flagged as already submitted. And we will help clients file a police report and report the identity theft to the Federal Trade Commission at identitytheft.gov. We will also walk clients through notifying their their banks and credit card companies and place a fraud alert with credit reporting agencies so they can monitor their credit report.
Being a victim of tax identity theft is difficult, but we make dealing with the effects of this type of theft as easy as we can for any of our clients who may experience it.