Tax Identity Theft Awareness Week

The Federal Trade Commission (FTC) has announced that February 3 through February 7, 2020, is Tax Identity Theft Awareness Week. Awareness Week is part of the FTC’s initiative to provide resources to help taxpayers secure their tax identity and protect themselves from scams. More information on the FTC’s Tax Identity Theft Awareness Week can be found here.

Tax identify theft is a serious matter. Consider the following actions to protect yourself:

Limit the flow of your personal information
Personal information typically includes a person’s marital status, birthdate, social security number, mother’s maiden name, birthplace, etc. You can protect this information by shredding or otherwise destroying any personal or financial documents, keeping your social security card in a safe and secure location, and limiting the amount and type of information you post on social media. You should also ensure you have reputable security software installed and properly updated on your computers and other devices and that any wireless networks you have are secured with a password. Avoid entering usernames and passwords while using a shared internet connection or a public wireless network, as these connections are vulnerable.

Check your information on a regular basis
In addition to continuously checking credit card and bank statements to make sure there is no unauthorized use, monitor your credit report on a regular basis. Each of the three credit reporting agencies are required to provide you with a free report at least once a year. To obtain your free reports, visit www.annualcreditreport.com. It is also a good idea to review your work history with the Social Security Administration. This can also be done online by creating an account at www.socialsecurity.gov/myaccount.

Know what to do if your identity has been stolen
In the unfortunate event your identity is stolen, there are a number of steps you should take immediately to put a stop to the theft:
- Call the company or institution where you discovered the fraud occurred and notify them of the theft. Request that they close or freeze your accounts, and then change any login, password, or PIN information you may have.
- Place a fraud alert on your credit report by contacting one of the three credit reporting companies. The company will then notify the other two companies. Get a free copy of your credit report and review it for any accounts or transactions you don’t recognize.
- Contact the FTC online at www.identitytheft.gov to notify them that your identity was stolen. Their website will also walk you through these steps and help you create a recovery plan.

Once the theft has been reported and your accounts are secure, you will need to start mitigating the damage. Any fraudulent accounts that were opened should be closed, fraudulent charges should be removed from your accounts, and your credit report should be corrected. You should consider taking advantage of an identity theft monitoring agency, and placing an extended fraud alert or credit freeze on your account.

Take these additional steps if you are a victim of tax-related identity theft
If you learn your identity has been stolen by receiving an IRS notice with inaccurate information, or you are unable to file a return electronically because one has already been filed under your social security number, take the following immediately:
- Respond to any IRS notices right away by either calling the IRS at the number provided on the notice, or contacting your HBK tax advisor.
- If the notice instructs you to verify your identification, you should visit www.idverify.irs.gov and follow the steps provided. You will need to have the following information available:

  • Your prior year tax return
  • Your current year tax return, if filed
  • Any supporting documents, such as W-2s or 1099s

- If your e-filed return was rejected because of a duplicate filing, complete Form 14039, “Identity Theft Affidavit,” and mail or fax it to the IRS with proof of your identity.
- Continue to file your tax return and pay all taxes owed, even if you have to paper file.

The Identity Protection PIN Program
If you are a victim of tax-related identity theft and follow the above steps, the IRS will automatically issue you an Identity Protection (IP) PIN. The IP PIN is a 6-digit number that the IRS assigns to eligible taxpayers to help prevent the misuse of their social security number on fraudulent federal income tax returns.

The IRS will mail you a CP01A Notice with your IP PIN. If you have been issued an IP PIN you can obtain a lost IP PIN or opt into the program through the irs.gov website.

The IP PIN helps the IRS verify a taxpayer’s identity and accept their electronic or paper tax return. We will need this PIN in order to file your tax return.

Be Aware of Common Scams
It is important to stay vigilant and be aware of current scam attempts or warning signs that could indicate your identity is at risk. The IRS never initiates contact by phone or email to discuss a tax matter; their first contact is always by mail. Additionally, the IRS never requires payment with a prepaid debit card or a money transfer. Such solicitations are warning signs that you are not speaking with the IRS.

If you believe you have been contacted by a fraudulent person you can file a complaint with the Treasury Inspector General for Tax Administration at tigta.gov or 800-366-4484. You can also file a complaint and report the fraudulent call with the FTC at ftc.gov/complaint or 877-FTC-HELP.

As always, we’re here to help. Please contact us with your questions or concerns.

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About the Author(s)
Cassandra Baubie is a Senior Associate at HBK CPAs & Consultants and is a member of its Tax Advisory Group (TAG). Cassandra joined HBK in 2017. She works in the firm’s Youngstown, Ohio office. She has experience in tax law research and writing. Prior to joining HBK, she worked for Jurist.org, a global legal news organization, and was a member of the University of Pittsburgh Tax Law Review Journal. Cassandra also worked for the University of Pittsburgh School of Law’s Low-Income Tax Clinic where she performed IRS litigation and Tax Court work and provided compliance work for low income individuals and businesses. Cassandra focuses on issues pertaining to State and Local Taxation (SALT), as well as flow through entity taxation. She has been involved in numerous sales and use tax, franchise tax, and corporate income tax audits, VDA’s, and refund requests. She focuses on complex sales and use tax compliance planning, nexus studies and on-site review and training for all SALT related issues, and has managed various engagements as the in-charge team member and has significant experience in multi-state tax issues.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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