Thomson Reuters Releases Guide for Assisting with Tax-Related ID Theft

Thomson Reuters released a special report, What to Do If Your Client is a Victim of Tax-Related Identity Theft, providing guidance for tax professionals advising victims of ID theft.

Thomson Reuters cites a September 27, 2015 Bureau of Justice Statistics press release finding that 17.6 million U.S. residents age 16 or older were victims of at least one incident of identity theft in 2014, compared to 16.6 million in 2012. And according to a 2016 IRS report, more than 1.3 million taxpayers’ accounts had been targeted and 724,000 were fraudulently accessed for ID theft.

“There is no doubt that tax-related identity theft will continue for the foreseeable future,” stated Trenda Hackett, technical editor with the Tax & Accounting business of Thomson Reuters and author of the report. “As your client’s trusted advisor, knowing how to advise and navigate them through the resolution process is a great way to demonstrate value.”

In addition to helping practitioners and taxpayers understand trends, tax fraud schemes and developments in identity theft, the report explains:

  • The warning signs of tax-related identity theft at filing and after filing tax returns.
  • Steps practitioners can take when their clients receive IRS letters 4464C, 5071C, 4883C or Notice CP01B alerting them to fraudulent returns filed on their behalf and requesting identity verification.
  • Steps practitioners can take when their clients receive letter 4491C explaining that someone used their social security number to obtain employment.
  • A list of what to do when a client suspects identity theft.
  • What clients need to do in relation to actions the IRS takes in resolving tax-related identity theft.
  • What contributes to the delays in resolving these thefts.
  • When to contact the Taxpayer Advocate Service.
  • How victims can request a copy of the fraudulent tax return.

The free report and supplemental client summary is available for download here.

For reprint and licensing requests for this article, click here.