Prevent Tax Identity Theft in 2021 Before It Happens!
We are already a quarter way through 2021! That means it’s time to get organized for the big things to come. There are so many activities that keep us busy during the year, and life tends to throw us curveballs a few times while we’re at it. In fact, many of us might not be aware that tax identity theft is a common crime, and anyone is at risk, not just those with bigger returns in April.
So, before disaster strikes, and your personal and financial information are compromised, call Plan IV to set up a strategy to prevent tax identity theft from occurring. But, before you do, you might be asking what tax identity theft really entails, and how it could potentially affect you this year.
What Is Tax Identity Theft?
When someone files a tax return using your Social Security Number (SSN), this is the most common form of tax identity theft. Criminals also pursue the customized tax returns of others in order to demand a fraudulent tax refund. Additionally, offenders may have obtained work records, credit information, and other personal information using your SSN.
Tax-related identity fraud victims face significant financial difficulties. You may not only be unable to file your own returns (or demand your tax refund), but you may also be experiencing other financial difficulties. It's possible that the victim's identity was used to open unauthorized loans, credit cards, and other accounts.
When tax-related identity fraud happens, victims are usually advised to freeze their credit. They will also need to negotiate with banks and credit bureaus to clear their names of any fraudulent activity.
How Can This Kind of Theft Affect You?
Tax-related identity fraud occurs when a taxpayer's personal information is seized or made public at random. Data breaches, cybersecurity hacks, and weaknesses in current programs designed to secure an individual's information are all common causes of this problem for taxpayers.
The IRS has developed identity fraud teams, implemented additional protections, and altered many of the filing and authorization requirements. Despite these measures, identity-related tax fraud does occur, and it's critical that everyday Americans be prepared if it does.
How to Know If You’re a Target
If you are a victim of tax fraud, there are a few things you should be aware of. First, the IRS can flag your valid tax return and send it back to you. When you go to file your tax return, the IRS can refuse it if a return for your Social Security number has already been filed. If you filed a paper return, you’ll receive a letter in the mail, informing you that your return had been filed previously.
If a criminal uses your SSN to obtain jobs, you will normally not be aware of the problem until your tax returns have been filed and processed. The IRS will send a letter stating that you failed to report income or that you owe extra taxes if your recorded income does not match the income reported by employers to your SSN.
It's important to remember that the IRS can only communicate with you via mail. The agency will not contact you by phone, text, or email about your returns or any suspicious behavior. Don't give out personal information to someone posing as an IRS agent using these tactics and report the problem to the U.S. Treasury Inspector General for Tax Administration.
Your Tax Identity Was Stolen… What Should You Do?
To notify the IRS of the issue, fill out Form 14039. Return the form to Internal Revenue Service, P.O. Box 9039, Andover, MA, 01810-0939, along with a copy of the Social Security card and driver's license. Send the letter through certified mail to ensure that it arrives safely and undamaged. Include a copy of the notice you got in the mail with your message.
If you've received Letter 5071C, complete that. If your return is flagged as suspicious or fraud is suspected, the IRS can give you Letter 5071C. This form asks you to check your identity and walks you through the process. Once your identity has been verified, follow these instructions to the letter and take any additional measures that are recommended.
- Apply for an Identity Protection PIN. This is a six-digit number that the IRS uses to confirm your identity on all future returns and filings.
If you attempted to e-file but were denied, you could file your paper return and pay any taxes due by mail. If you need assistance at any point during the process, contact the IRS Identity Protection Specialized Unit at (800) 908-4490. An agent will guide you through the process of reporting and responding to the issue.
If you haven't already been a victim of tax-related identity fraud, you should take steps to avoid it. This entails safeguarding your personal information, shredding confidential documents, and securing all online accounts with strong passwords.
Trust Plan IV for Information on Taxes and Health Insurance Plans
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