A guide if you are a victim of tax refund, or tax return fraud.

by Rick Glaser on March 22, 2012

Tax return fraud is becoming a bigger and bigger problem every year. Most people panic when they find out they are a victim, and for a good reason.

Many times people discover they are a victim when they receive a bill from the IRS for a few thousand dollars, or cannot understand what they are being asked to provide during an audit. It is important to keep good records of your taxes and write down all information. Whenever you talk to an IRS agent, it can be very helpful to write down their name, ID, and location. This way you are able to reference that call in the future. Also keep in mind that there are many people who would prefer to blame their taxes on fraud instead of paying what is due. This is unfortunate but is the main reason that the IRS is not going to be welcoming the thought of fraud immediately. You will have to provide proof along the way.

It is critically important to get a transcript, and review all details on your record before agreeing to pay the IRS (if you have reason to believe that they are mistaken, or someone has illegally filed taxes using your personal information). A transcript will show a summary of your tax return along with any actions taken, expenses written, payments, amended returns, and corrections because of math mistakes.

Here are a few examples of what your transcripts will look like:

2009 Tax Year Transcript

2009 Tax Year Transcript

2009 Account Status Transcript

2009 Account Status Transcript

In order to get your tax transcript call 1.800.829.0922

When you are sure your refund was fraudulent do the following:

  1. Contact the IRS exam unit at 1.866.897.0161. Be sure to get a fax number or address in order to submit all of the necessary paperwork. If you have previously spoken with an IRS agent and they have suggested that you are a victim of identity theft, reference the date and time of that original call. If you have a reference number, contact name, and location of where the original call was routed that can also be a help.
  2. Print out a FORM 14039 which is the Identity Theft Affidavit. We have a copy here, or you can go to the IRS website and locate it. This form is very important and will switch your account status from being audited or non paid, to an identity theft case. Usually when your account is being audited, there will be specific things you need to make happen in a timely manner. Once you submit the FORM 14039, your putting everything back into the IRS’ court.
  3. File a police report. You will need the report number from your local police department.
  4. Call the following hotlines and let them know you are a victim of tax fraud.
    • Federal Trade Commission: 1.877.438.4338. or visit FTC.gov
    • Social Security Administration: 1.800.772.1213 or visit SSA.gov
    • Equifax (You need to contact one credit bureau and they will notify the others: 1.800.525.6285 or visit Equifax.com
  5. Get a copy of your W2 from the tax year in question. You can typically get this from the Social Security Administration by visiting a local office. To find an office close to you visit this link on the SSA.gov website. This will give you more evidence when you go to submit all of these forms to the IRS. Remember, you still have to prove that you are a victim of identity theft, and each item you can provide will help build your case. It is equally important to file your taxes for the tax year in question once you have a copy of your W2 from that year. If you are self employed, you will need to contact an accountant and have them file the correct return as well.
  6. Use the cover letter from your transcript (please see example below) as the cover letter when you fax or mail all of your information to the exam unit at the IRS. This information can be different based on each person specific case. During step (1) you should have received the Fax and Address to send everything to.
IRS Transcript / Cover Letter

IRS Transcript / Cover Letter

The process can be frustrating and identity theft is never going to be an easy process to go through. Check your status regularly by contacting the IRS directly, consulting with your CPA or tax professional, and keeping track of any notices you receive via mail or telephone.

If you follow this guide you will make the process smoother and will avoid any headaches.

Please leave a comment with any experiences that you have had. Let’s work together to prevent fraud from happening!


{ 3 comments… read them below or add one }

1 Dan March 23, 2012 at 4:06 pm

This is excellent info for me to share with my readers, thank you!

Dan :)


2 sean March 23, 2012 at 4:08 pm

Absolutely. Was this resource complete enough?


3 rick March 23, 2012 at 4:18 pm

It seems complete Mr. Sean but there will be a followup. I am genuinely concerned about the safety of our tax payers and will dedicate as much time and energy as it takes.


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