Identity theft can be a taxing situation

Charlie Jones, Sr. Vice President, Compliance, JKHarris and Company

Identity theft is growing in our nation at an increasingly alarming rate. Statistics from a survey commissioned in 2006 by the Federal Trade Commission show:

  • Number of victims: 9.3 million
  • Average out of pocket loss for victims: $371
  • Hours spent per victim resolving the problem: 30

When you hear about identity theft, chances are you think of credit or bank accounts being the targets of such attacks.  What many taxpayers do not realize is identity thieves are beginning to falsify tax returns using stolen Social Security numbers.  In some cases, undocumented workers are reporting W-2 income using your Social Security number which leads the IRS to believe you have not reported all of your income when you file your income tax return.

According to the National Taxpayer Advocate, Nina Olsen, identity theft is a growing problem for taxpayers and the Internal Revenue Service.  Cases where a Social Security number was used by someone it did not belong to increased 129% from 2002 to 2006.  Olsen also said during the same period, cases where someone other than the taxpayer filed a tax return and claimed a refund increased 396%.  She went on to state it can take more than a year to determine which taxpayer is entitled to use a Social Security number.  She said the IRS is in the process of developing a centralized unit to deal with identity theft cases.  This would include a special hot line for taxpayers to use if they suspect they are victims of identity theft.  The hot line is scheduled to be available October 2008.

If you have already fallen victim to identity theft, you may have received a notice from the IRS stating you owe back taxes, penalties and interest“.  Contact JK Harris or a tax professional for assistance.  Chances are, you may be eligible to claim “Doubt as to Liability” through an Offer in Compromise

For more information on preventing identity theft, visit the IRS’ website at http://www.irs.gov/individuals/article/0,,id=136421,00.html or http://www.irs.gov/individuals/article/0,,id=136199,00.html.

This entry was posted on Wednesday, September 3rd, 2008 at 2:13 pm and is filed under Back Taxes, IRS Regulations, Offer in Compromise, Tax Alerts. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

One Response to “Identity theft can be a taxing situation”

  1. Scam Email Send Malicious Software to Recipients’ Computers « JK Harris Tax Resolution Blog Says:
    October 8, 2009 at 10:04 am

    [...] mailbox set up for this purpose, phishing@irs.gov. Those who believe they may already be victims of identity theft should find out what do by going to the U.S. Federal Trade Commission’s Web site, [...]

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