by Bruce Sires
We were made aware of this fraud when the IRS sent a letter inquiring about a 2011 Form 1040A allegedly filed by our client, who happened to have died in January of 2011. The taxpayer's 2011 tax return had not been prepared or filed, and it was clear that someone had obtained the taxpayer's Social Security Number ("SSN") and filed a falsified return in the taxpayer's name, claiming a fraudulent refund. The return requested a direct deposit into an account which was not in the taxpayer's name. The IRS was alerted to the possible fraud, because they had received notice from the Social Security Administration of the taxpayer's death. However, in many cases there are no obvious indicators of fraud, and we've heard that the Service has made direct deposit refunds into accounts shown on fraudulent returns, which do not belong to the taxpayer!
What should be done if the IRS notifies you that someone has claimed a fraudulent refund under your SSN? Immediately call the IRS to confirm the fraud and ask them to flag your return. The Service will flag your account regarding potential identity theft. Also, notify your accountant, bank, financial advisor, and credit card companies that you may be the victim of identity theft. All of your accounts should be closely monitored for any suspicious activity, and consider closing all existing accounts (and opening new ones) to prevent unauthorized purchases, cash transfers or withdrawals.
If you haven't received such a letter, it is still a good idea to carefully review your bank and brokerage statements as well as credit card bills to be sure there is no unfamiliar activity, and where there is a suspect transaction follow up to be sure the issue isn't anything other than authorized use by your spouse, partner or children, or a memory lapse. Finally, in this era of identity theft and fraudulent refund claims, you may want to regularly check your account with the IRS to be sure that only returns you have actually filed are reflected on their records.
What should be done if the IRS notifies you that someone has claimed a fraudulent refund under your SSN? Immediately call the IRS to confirm the fraud and ask them to flag your return. The Service will flag your account regarding potential identity theft. Also, notify your accountant, bank, financial advisor, and credit card companies that you may be the victim of identity theft. All of your accounts should be closely monitored for any suspicious activity, and consider closing all existing accounts (and opening new ones) to prevent unauthorized purchases, cash transfers or withdrawals.
If you haven't received such a letter, it is still a good idea to carefully review your bank and brokerage statements as well as credit card bills to be sure there is no unfamiliar activity, and where there is a suspect transaction follow up to be sure the issue isn't anything other than authorized use by your spouse, partner or children, or a memory lapse. Finally, in this era of identity theft and fraudulent refund claims, you may want to regularly check your account with the IRS to be sure that only returns you have actually filed are reflected on their records.
You can order tax return transcripts online (www.irs.gov and go to the "Order a Return or Account Transcript" link), with a call to the IRS at 1-800-908-9946, or by filing the appropriate form with the IRS: Form 4506, Request for Copy of Tax Return; Form 4506-T, Request for Transcript of Tax Return; or, Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript. The time spent carefully and regularly monitoring your finances could save you from a major disaster.
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