Nobody likes paying taxes; it\u2019s just one of those things that has to be done. Besides, there\u2019s often the prospect of a nice refund to invest or to spend on something fun. It\u2019s what financial advisors call \u201cforced savings\u201d \u2014 you\u2019re just getting your own money back \u2014 but if you struggle to save, as many people do, it\u2019s a useful way to accumulate a lump sum every year. <\/p>\n\n\n\n
That\u2019s why it\u2019s especially galling to discover that a scammer has already filed a tax return in your name, and has claimed the refund you\u2019d worked so hard to earn. That\u2019s just one of many forms of tax fraud you might encounter in your lifetime, and most of them are costly and inconvenient. If it should happen to you, you\u2019ll need to know how to report someone to the IRS. <\/p>\n\n\n\n
Tax fraud can take a number of different forms, and there\u2019s a correspondingly long list of signs that it has taken place. Aside from being told you\u2019ve already filed (when you haven\u2019t), some of the others include: <\/p>\n\n\n\n
There\u2019s a fuller list of potential danger signs on the IRS\u2019 own Taxpayer Guide to Identity Theft<\/a> page, but the common theme is clear enough: things are happening with your account without your knowledge or consent. <\/p>\n\n\n\n GET REAL-TIME FRAUD ALERTS AND FINANCIAL ACCOUNT PROTECTION WITH SPOKEO PROTECT<\/a><\/span><\/em><\/strong><\/p>\n\n\n\n If your Social Security number fell into the wrong hands<\/a>, for example, scammers might combine it with other people\u2019s personal information to create a \u201csynthetic\u201d identity<\/a>.\u00a0 That fake person could then get a job under another name but file using your SSN, which means you won\u2019t then be able to file.\u00a0 Alternatively, thieves might steal your minor child\u2019s SSN<\/a> and claim that deduction themselves.\u00a0 The possibilities are endless.\u00a0<\/p>\n\n\n\n First and foremost, you\u2019ll still need to file your own return on time and continue to pay your taxes. If you\u2019ve discovered the (likely) fraud because you were unable to e-file your return, that means you\u2019ll need to file the old-fashioned way: on paper. Download and complete a copy of IRS Form 14039<\/a>, the Identity Theft Affidavit, and attach it to your physical return. Mail the completed return to the regional IRS processing center that\u2019s appropriate for your location. <\/p>\n\n\n\n A lot of things start happening once the IRS receives your return. First, they\u2019ll mail you an acknowledgement that they\u2019ve received your return and your affidavit and that they\u2019ve launched an investigation. That investigation will look at, among other things: The entire process usually takes about 120 days, but if your taxes are relatively complex it can take up to 180 days to come to a full resolution. You won\u2019t get to see the details of the fraudulent return initially, because of privacy concerns: The IRS needs to be sure your complaint is legitimate, or else letting you see a disputed return that someone else filed would itself be a security breach.<\/p>\n\n\n\n Another common form of identity-theft-related tax fraud sees the scammers claiming unemployment benefits in your name. This particular fraud became a gold mine for scammers during the COVID pandemic, when large numbers of workers were laid off, terminated or placed on furlough. It\u2019s a particularly nasty crime, because when you need unemployment benefits you really<\/em> need them. <\/p>\n\n\n\n Benefits are treated as taxable income, so you\u2019ll often learn you\u2019ve been the victim of this particular crime when you receive a 1099-G showing income from a fraudulent claim in your name. Because benefits are managed at the state level, you\u2019ll need to report the case in the state where it occurred, as opposed to contacting the IRS directly. The Department of Labor provides a useful guide<\/a> to that process. <\/p>\n\n\n\n The specific steps you need to take, and the time required to reach a resolution, will vary between states. If tax season rolls around in the meantime, file a return reporting only the income you\u2019ve legitimately received. Eventually you\u2019ll receive a corrected 1099-G, and at that point \u2014 if necessary \u2014 your return can be adjusted retroactively. <\/p>\n\n\n\n There are other forms of tax fraud that don\u2019t fit neatly into the \u201csteal an identity, file a return\u201d category. Those might include concerns about a shady tax preparer, a scammer promising to reduce your taxes. You may not even need to be the victim: Perhaps you\u2019ve realized that your employer or a business you have dealings with is dodging its share of taxes. <\/p>\n\n\n\n The IRS doesn\u2019t take phoned-in reports for cases like that. Instead, you\u2019ll find a list of appropriate forms on the agency\u2019s tax-fraud reporting page<\/a>. A few examples include: <\/p>\n\n\n\n Because tax-avoidance schemes are a constant drain on government revenues (and therefore a burden to all taxpayers), in some circumstances the IRS may pay out a cash award to whistleblowers. If you\u2019re eligible for such an award, you\u2019ll have the happy duty of completing Form 211<\/a>, Application for Award for Original Information. <\/p>\n\n\n\n Sometimes the shoe will be on the other foot: Instead of you contacting the IRS to report tax fraud, the agency will reach out to you. If the IRS\u2019 own internal security checks pick up on a potential case of fraud involving your return, you\u2019ll receive a Letter 4883C<\/a> in the mail. <\/p>\n\n\n\n The letter lets you know that the IRS needs you to verify your identity, and requests that you call a toll-free number. Before you pick up the phone, you\u2019ll need to gather up your copy of the return they\u2019re inquiring about, as well as a previous year\u2019s return for validation purposes. You\u2019ll also need any supporting forms or schedules that accompanied either of those returns when they were filed. <\/p>\n\n\n\n This may be your first inkling that you\u2019ve been the victim of identity theft or, if you knew there was a problem, just one more thing piled onto an already-full plate. Either way, you should take appropriate steps to minimize the damage caused by identity theft. <\/p>\n\n\n\n There are a number of additional steps you should take after reaching out to the IRS (or them reaching out to you). One is setting up an Identity Protection PIN<\/a> on your IRS account, to help prevent future incidents. You\u2019ll be issued a new 6-digit PIN for every tax season, and without that PIN nobody can access your IRS account. You can (and should) also change the password on your IRS account, and set up multi factor authorization \u2014 usually in the form of a code that\u2019s texted to your phone number of record \u2014 as an additional security measure. <\/p>\n\n\n\n Aside from managing the tax-specific aspects of your case with the IRS (and state tax authorities, if your state taxes are also affected), you\u2019ll need to follow the same steps as any other identity-theft victim. First and foremost, that means reporting your case to the FTC\u2019s IdentityTheft.gov<\/a> website. Not only does that make it official, the site will walk you through the creation of a recovery plan that\u2019s tailored to your specific circumstances. <\/p>\n\n\n\n The plan provides a checklist that guides you through notifying the major credit-reporting agencies, placing a credit freeze<\/a> or fraud alert with them, contacting any creditor or merchant that\u2019s been defrauded by the identity thief and just generally doing what you need to do to clean up the mess<\/a> your scammer has caused.\u00a0<\/p>\n\n\n\n There\u2019s no way around it, identity theft (in any form) is a massive inconvenience. Surprisingly, dealing with the IRS may not be the most unpleasant part of the whole exercise or take the longest to resolve. While it\u2019s a large and bureaucratic agency, it\u2019s also tightly focused, so once you complete the correct forms you\u2019ll have little to do but wait for the system to grind its way to a resolution. <\/p>\n\n\n\n IRS investigations are usually completed in four months or less, or up to 180 days in complex situations.\u00a0 Other aspects of identity theft can take longer to clear up (sometimes a lot<\/em> longer), and require a lot more hands-on involvement.\u00a0 On the whole it would be better to avoid identity theft<\/a> in the first place, but \u2014 when necessary \u2014 sorting things out with the IRS is relatively straightforward.\u00a0<\/p>\n\n\n\n Nobody likes paying taxes; it\u2019s just one of those things that has to be done. Besides, there\u2019s often the prospect of a nice refund to invest or to spend on…<\/p>\n","protected":false},"author":112,"featured_media":25483,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[810],"tags":[],"class_list":["post-25482","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-identity"],"yoast_head":"\nHow to Report Someone to the IRS<\/h2>\n\n\n\n
<\/p>\n\n\n\nUnemployment-Benefits Fraud<\/h2>\n\n\n\n
Reporting Other Forms of Tax Fraud<\/h2>\n\n\n\n
Responding to a Letter 4883C<\/h2>\n\n\n\n
Taking the Next Steps<\/h2>\n\n\n\n
The Bottom Line<\/h2>\n\n\n\n
Sources<\/h4>\n\n\n\n