Tax-related Incidents Are the Most Common Form of Fraud

Avoiding Identity Theft

By Cheryl M Fitzgerald, CPA, MST


Identity theft has become an increasing concern for all. The Federal Trade Commission (FTC) estimates that as many as 9 million Americans have their identities stolen each year. According to a Jan. 26, 2015, FTC press release, tax-related identity theft was the most common form of reported identity theft in 2014.

Personal information (including Social Security numbers) is stolen by using various methods (including dumpster diving, skimming, and phishing). The people stealing identities have become very adept and strategic in the ways that they are obtaining this information.

According to the Internal Revenue Service (IRS), tax-related identify theft occurs when someone uses your Social Security Number (SSN) to file a tax return claiming a fraudulent refund. Taxpayers are usually unaware of this until they receive a notice from the IRS indicating that multiple returns have been filed using the same SSN. The IRS uses your SSN to make sure your filing is accurate and complete, and that you get any refund you are due.

Cheryl M Fitzgerald

Cheryl M Fitzgerald

Remember to be extremely cautious when you receive unexpected e-mails or phone calls from the IRS. If no written correspondence preceded it, there is reason to be suspicious.”


Identify theft can affect how your return is processed. An unexpected notice or letter from the IRS could alert you that someone else is using your SSN; however, the IRS does not start contact with a taxpayer by sending an e-mail, text, or social-media message that asks for personal or financial information.

Some of the things that you can do to in the event that identify theft (not just with the IRS) has occurred are as follows:

• Call your credit-card companies if you believe fraud has occurred;
• Place a fraud alert on your credit reports and get copies of the report;
• Report identify theft to the FTC;
• File a report with your local police department; and
• Contact your financial institutions and close any financial or credit account opened without your permission.

If your SSN is compromised and you know or suspect you are a victim of a tax-related identify theft, the IRS recommends these additional steps:

• Respond immediately to any IRS notice. Call the number provided or, if instructed, go to;
• Complete IRS Form 14039 (identity-theft affidavit) if your e-filed return rejects because of a duplicate filing under your SSN or you are instructed to do so. Use a fillable form at, print, then attach the form to your paper filed return and mail according to the instructions; and
• Continue to pay your taxes and file your tax return, even if you must do so by paper.

According to the IRS, some suggestions that you can do in order to help reduce your risk are as follows:

• Always use security software with firewall and anti-virus protections, and use strong passwords;
• Learn to recognize and avoid phishing e-mails, threatening calls, and texts from thieves posing as legitimate organizations such as your bank, credit-card companies, and even the IRS;
• Do not click on links or download attachments from unknown or suspicious e-mails; and
• Protect your personal data; do not routinely carry your Social Security card, and make sure your tax records are secure.

These steps should be followed because, if an identity theft does occur, the situation can typically take many months to correct. Some identity-theft victims have experienced a year or more wait before receiving their appropriate refund. The IRS will typically tell taxpayers who inquire about the status of their identity-theft case that cases are resolved within 180 days; however, it has typically taken longer than that time frame.

In conclusion, the single most important takeaway is that the IRS will always send a written correspondence first. Remember to be extremely cautious when you receive unexpected e-mails or phone calls from the IRS. If no written correspondence preceded it, there is reason to be suspicious. With the increased occurrence of identity theft, it is especially important this tax season (and throughout the year) to be diligent with your information and take proper measures to secure it.

Cheryl M Fitzgerald, CPA, MST, is senior manager at Holyoke-based public accounting firm Meyers Brothers Kalicka, P.C.; (413) 322-3500;

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