Identity Theft Central Launched by IRS Focuses on needs of taxpayers, tax professionals and businesses The Internal Revenue Service has launched Identity Theft Central, designed to improve online access to information on identity theft and data security protection for taxpayers, tax professionals and businesses. Located on IRS.gov, Identity Theft Central is available 24/7. It is a resource on how to report identity theft, how taxpayers can protect themselves against phishing, online scams and more. Improving awareness and outreach are hallmarks of initiatives to combat identity theft coordinated by the IRS, state tax agencies and the nation’s tax industry, all working in partnership under the Security Summit banner. Since 2015, the Security Summit partners have made substantial progress in the fight against tax-related identity theft. But thieves are still constantly looking for ways to steal the identities of individuals, tax professionals and businesses in order to file fraudulent tax returns for refunds. The partnership has taken a number of steps to help educate and improve protections for taxpayers, tax professionals and businesses. As part of this effort, the IRS has redesigned the information into a new, streamlined page − Identity Theft Central − to help people get information they need on … Read More
Tax ID Theft Victims Fraudulent Return Copy Available As part of its continuing efforts to fight cyber tax crime, the Internal Revenue Service launched a new web page, Identity Theft Central. Among the areas this new IRS.gov section covers, is what to do if you're a victim of tax identity theft. This includes the process of getting a copy of a fraudulent return that was filed in your name. In the case of a 1040 filed by someone pretending to be a taxpayer in order to get a fraudulent refund, most would want to see a copy of the fraudulent return. In response to taxpayer requests, the agency's Fraudulent Return Request Program will send you a copy of the fake return if you are an ID theft victim. Following are the steps to be followed: The form must be completed with your real identifying data. This includes: Your name and Social Security number Your mailing address Tax year(s) of the fraudulent return(s) you are requesting Due to federal privacy laws, you can request the fraudulent return only if your Social Security number was the one used as either the primary or secondary taxpayer on the fraudulent return. Those privacy restrictions mean … Read More
Truncated Taxpayer Identification Numbers Rules – Final Regulations The IRS has issued final regulations that amend existing regulations to permit employers to voluntarily truncate employees' social security numbers (SSNs) on Forms W-2, Wage and Tax Statement, that are furnished to employees. The final regulations do not allow truncated numbers on W-2 forms filed with the Social Security Administration (SSA). In 2014, the IRS issued final regulations authorizing the use of truncated taxpayer identification numbers (TTINs) on certain payee statements and certain other documents. The 2014 regulations were in response to concerns about the risks of identity theft, including its effect on tax administration. Prior to being amended by the Protecting Americans from Tax Hikes (PATH) Act of 2015, Code Sec. 6051(a)(2) specifically required employers to include their employees' SSNs on copies of Forms W- 2 that are furnished to employees. The PATH Act amended Code Sec. 6051(a)(2) by striking "his social security account number" from the list of information required on Form W-2 and inserting "an identifying number for the employee" instead. Because an SSN is no longer required by Code Sec. 6051, in 2017, IRS issued proposed regs to permit employers to truncate employees' SSNs to appear in the … Read More
The IRS and its partners in the Security Summit have succeeded in reducing reports of identity theft by 71% in the last three years. Between 2015 and 2018, the number of filed identity theft affidavits fell to 199,000 reports in 2018 from 677,000 in 2015, the IRS said in an April 8th news release, IR-2019-66. During that same period, the IRS protected a combined $24 billion in fraudulent refunds, with financial industry partnerships recovering an additional $1.4 billion. “At a time when many in the private sector continue to struggle with these issues, the tax community has made major progress working together to stop identity theft and refund fraud,” IRS Commissioner Charles Rettig said in the news release. NSTP members should note that the IRS has identified two areas of concern moving forward: data theft from tax professionals, and business identity theft. The theft of business identity information is used to file fraudulent business returns, where the requested refunds are significantly larger than fraudulent individual returns. According to the IRS news release, the number of businesses reporting they were victims of tax-related identity theft increased by 10% in 2018.
Tax-related identity theft occurs when a thief uses someone’s stolen Social Security number to file a tax return and claim a fraudulent refund. The victim may be unaware that this has happened until they e-file their return. Even before the victim files their return, the IRS may send the taxpayer a letter saying the agency identified a suspicious return using the stolen SSN. Here are some things people should know about identity theft, including warning signs and steps to take after identity theft occurs. Warning signs that a theft occurs Taxpayers should be alert to possible tax-related identity theft if they are contacted by the IRS or their tax preparer about: More than one tax return being filed using the taxpayer’s SSN. Additional tax owed. A refund offset. Collection actions taken against the taxpayer for a year when they did not file a tax return. IRS records indicating they received wages or other income from an employer for whom the taxpayer did not work. Taxpayers who suspect they are a victim of ID theft should continue to pay their taxes and file their tax return, even if they must do so on paper. Steps to take if someone becomes a … Read More
The Ways and Means Committee on April 2 approved legislation by voice vote that would rework some IRS operations — setting up a vote on the House floor in the coming weeks. The legislation, the Taxpayer First Act of 2019, is a bipartisan, bicameral measure that is supported by the leaders of both tax-writing committees in Congress. The measure is expected to sail through the House, but it’s unclear when the Senate will act on companion legislation introduced by Senate Finance Committee leaders Chuck Grassley (R-IA) and Ron Wyden (D-OR) March 28. A spokesman for Grassley didn’t offer a timeline but said there’s no reason the bill shouldn’t pass the Senate since it has such broad support. Provisions in the legislation include the following: IRS Modernization – The Treasury Department would have to develop a plan to modernize the IRS’s structure by September 30, 2020. The plan would have to consider whether the Criminal Investigation Division should report directly to the head of the IRS, instead of the deputy commissioner for services and enforcement. Online Services – The Treasury Department would have to create an online service for taxpayers to prepare and file 1099 forms, which are generally used for … Read More