The Internal Revenue Service (working together with state tax agencies and the tax industry to comprise the “Security Summit”) has recently highlighted specific signs of identity theft that tax professionals should be on the lookout for so they can help protect themselves and their clients.
Five Critical Signs
- Client e-filed returns rejected because client’s Social Security number was already used on another return.
- More e-file acknowledgements received than returns the tax professional filed.
- Clients responded to emails the tax pro didn’t send.
- Slow or unexpected computer or network responsiveness, such as: Software or actions take longer to process than usual; computer cursor moves or changes numbers without touching the mouse or keyboard; and unexpectedly locked out of a network or computer.
- Clients report that they’ve received any one of the following: IRS authentication letters (5071C, 6331C, 4883C, 5747C) even though they haven’t filed a return; a refund even though they haven’t filed a return; a tax transcript they didn’t request; emails or calls from the tax professional that they didn’t initiate; a notice that someone created an IRS online account for the taxpayer without their consent; a notice the taxpayer wasn’t expecting that:
- Someone accessed their IRS online account;
- The IRS disabled their online account; or
- Balance due or other notices from the IRS that aren’t correct based on return filed or if a return hadn’t been filed.
Tax professionals who suspect they or their clients have been victims of identity theft should report it immediately to the IRS as well as contact their insurance or cybersecurity experts to assist them with determining the cause and extent of the loss. They should:
- Report it to the local IRS Stakeholder Liaison. Liaisons will notify IRS Criminal Investigation and others within the agency on the practitioner’s behalf. Speed is critical. If reported quickly, the IRS can take steps to block fraudulent returns in the clients’ names and will assist tax professionals through the process.
- Email the Federation of Tax Administrators at [email protected]