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IRS Steps up Efforts to Combat Identity Theft

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Washington, D.C. (January 10, 2012)

By Michael Cohn, Accounting Today

The Internal Revenue Service has increased its battle against identity theft, creating a special section on its Web site dedicated to helping growing numbers of tax fraud victims.

The new section includes tips for taxpayers and a special guide to assistance, ranging from contacting the IRS Identity Protection Specialized Unit to tips to protect against “phishing” schemes. The IRS said it is also taking further steps this tax season to prevent identity theft and detect refund fraud before it occurs.

A pilot program begun in 2010 to mark the accounts of deceased taxpayers to prevent misuse by identity thieves is expanding, the IRS noted. The IRS is also expanding an initiative this year to protect victims with previously confirmed cases of identity theft. 

In late 2011, a group of taxpayers received a special Identity Protection Personal Identification Number, or IP PIN, for use in filing their tax returns for this filing season. The IRS is also working to speed up case resolution, provide more training for employees who are supposed to assist identity theft victims, and increase the agency’s outreach to taxpayers.

Fighting identity theft will be an ongoing battle, however, the IRS acknowledged. Identity thieves continue to create new ways of stealing personal information and using it for their gain. Identity theft cases are among the most complex types of incidents handled by the IRS, but the agency said it is continually reviewing its processes and policies to minimize the incidence of identity theft and to help those who find themselves victimized by it.

National Taxpayer Advocate Nina Olson has urged the IRS to do more to combat identity theft. Congress has held hearings to shed light on the growing problem faced by many taxpayers and how the IRS has not always been responsive to the problems faced by taxpayers whose tax refunds have been stolen (see IRS Struggles to Control Taxpayer Identity Theft and Shulman Apologizes for Rudeness of IRS Employees).

If a taxpayer receives a notice from the IRS indicating identity theft, they should follow the instructions in that notice, according to the IRS. A taxpayer who believes they are at risk of identity theft due to lost or stolen personal information should contact the IRS immediately so the agency can take action to secure their tax account. The taxpayer should contact the IRS Identity Protection Specialized Unit at (800) 908-4490. The taxpayer will be asked to complete the IRS Identity Theft Affidavit, Form 14039, and follow the instructions on the back of the form based on their situation.

The IRS said it has developed a comprehensive identity theft strategy in the past year focused on preventing, detecting and resolving identity theft cases as soon as possible. However, the IRS noted that it needs to balance delivering tax refunds in the intended timeframe while ensuring that appropriate compliance controls are in place to minimize errors and fraud.

The IRS said it is taking a number of steps to prevent identity theft, and detect and stop identity theft attempts, including designing new identity theft screening filters to improve the agency’s ability to spot false returns before they are processed and before a refund is issued, as well as placing identity theft indicators on taxpayer accounts to track and manage identity theft incidents. The IRS Criminal Investigation division, in partnership with other law enforcement agencies, is also investigating criminals who perpetrate identity theft crimes.

Taxpayers looking for additional information can consult the Taxpayer Guide to Identity Theft or the IRS Identity Theft Protection page on the IRS Web site.

4 Comments

It's nice to see the IRS is taking measures to combat identity theft, but we have to do our part as well. One is to be careful while distributing your personal information. We shoudn't routinely carry our Social Security card or other documents that display our SSN. Only use secure websites while making online financial transactions, including online shopping. Never open suspicious attachments or links, even just to see what they say and never respond to emails from unknown senders. Install anti-virus software and a firewall, keep it updated, and run it regularly.

For taxpayers planning to e-file their tax returns, the IRS recommends use of a strong password. Afterwards, save the file to a CD or flash drive and keep it in a secure location. Then delete the personal return information from the computer hard drive.

Finally, if working with an accountant, query him or her on what measures they take to protect your information.

Source: http://www.prestinaegele.com/how-do-i…-guard-against-taxpayer-identity-theft

Posted by: AndrewWayne | August 21, 2012 12:48 AM

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The IP Pin sounds like a good thing -- until someone steals it!

Posted by: MAKCPA | January 12, 2012 9:45 AM

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Maybe everyone should be issued an IP pin

Posted by: foresthillstax | January 11, 2012 9:44 AM

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A good thing. Anything that can be done to deter those who find it profitable to steal, is a good thing.

Posted by: CoachMaria | January 11, 2012 8:13 AM

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