As we head into another tax season we should all be vigilant of the ever expanding con artists using the tax system to prey on the unsuspecting. We all probably know someone who has had their identity stolen. The recent well publicized data security breaches at major retailers and Sony has put consumers at risk as we become ever more connected.
TAX RETURN FILING: Part of the new problem is identity thieves know the IRS waits until the March deadline to review EIN’s and Social Security Numbers so these thieves file very early. In that period of time, the thief collects the tax refund and then after the IRS review, the business owner or individual receives communications from the IRS demanding a return of the tax refund.
Quick action is critical. First call the IRS Identity Protection Specialization Unit (800-908-1490). You need to establish a record. Next complete IRS form 14039-Identity Theft Affidavit and submit the form to the IRS. We recommend filing your “correct original” tax return by certified mail or overnight mail with a letter of explanation. You should also contact the Social Security Administration as the improper tax return can affect your credits. It is not a bad idea to pull your credit report as well.
TELEPHONE SCAMS: Often time’s businesses or clients receive a telephone call from someone claiming to be from the IRS. Please note these calls are frauds. The IRS does not call you over the telephone out of the clear blue. You can also call the Treasury Inspector General if this occurs (800-366-4484) to report the incident.
BUSINESS IDENTITY THEFT: The typical and simple mode of thieves is to select an established business identity and then establish a fraudulent office. That business name will then be used to establish either a new line of credit or a new bank account to purchase goods and services until the credit line or other resources are exhausted, then the thief just moves on.
DORMANT, SHELL AND AGELESS BUSINESSES: Another new method is for thieves to access and online business registries for ones that were previously dissolved or dormant. These businesses are particularly vulnerable to this type of crime because their owners are less likely to be monitoring the situation. The wrongdoer merely takes advantage of a well established history and credit rating to commit the fraud.