Tax Season Safety

As tax season gets into full swing here is something you are going to want to be aware of before something bad happens. First off, there is a procedure that the IRS uses to confirm your identity. You need to be aware of this because I guarantee criminals are and they are robbing people everyday.

Tax refund fraud will cost people over $21 billion dollars this year.

In the event the IRS needs to verify your identity you will receive a 5071C letter. You will need to have your prior year’s tax return and current year’s tax return, W-2, 1099, and Schedule A and C ready before you take steps to verify your identity. Verification takes place in two ways.

1. Call the number at the top of  5071C letter to speak to someone at the agency.
2. You will be asked to answer a series of questions at idverify.irs.gov. These questions will be related to your contact information and information from last year’s tax return like your adjusted gross income.

This process can be a frightening experience especially if you, or the IRS, suspect identity fraud. Now, as I said earlier, you need to be careful not to fall victim to any scams. You will know it’s the IRS reaching out to you because you’ll get the official 5071C letter in the mail. The IRS never initiates contact with you by phone or email. Should you receive an unsolicited email that appears to be from the IRS, report it by sending it to [email protected]. Don’t click on any links or open any attachments.

But the real problem is that scammers know how the IRS operates and have found the weaknesses.

A prime example was found on Krebsonsecurity.com. The article describes the efforts of a man who had to fight for his identity and tax refund when it was stolen…from the IRS! How? According to the article the scammers managed to get his information by copying all of the data from his previous year’s W2. The victim believes the scammers obtained that W2 data directly from the IRS. Apparently they created an account at the IRS.gov portal, idverify.irs.gov, in his name then used a different email address and requested his tax transcript. As I said the crooks know the system and how to work it. The point being you need to register with the IRS before some crook does it for you. Don’t fall for any IRS information requests via text messages or social media either.

This situation is really terrifying because not even the IRS systems are as safe as you may think. It is a well known fact that the IRS systems are outdated and the agency is under-staffed and poorly trained.

Sadly the IRS is not the only government agency whose identification methods leave Americans vulnerable. Believe it or not the same process used to obtain a tax transcript at IRS.gov will also work to obtain a free credit report from annualcreditreport.com a government mandated website.

Americans who have not already created an account at the Social Security Administration under their Social Security number are also vulnerable to crooks hijacking Social Security benefits.

Here are a few other things you need to know. IRS.com is different than IRS.gov. Don’t get them confused. There are plenty of fake IRS websites you’d better be looking for.

Here is some more helpful information for taxpayers to help keep you safe.

A YouTube Video of Tax Scam Artist on the phone.

YouTube videos on identity theft from the IRS.

Searchable directory of preferred tax professionals.

Now you know.