Tax Identity Verification Letter Could Mean Fraud: A Checklist of What To Do– October 31, 2014 by Laura White

Did you receive a letter from the IRS (specifically LTR 5071C) or a letter from the Ohio Department of Taxation asking you to verify your identity or suggesting you may be a victim of identity theft? If so, you’re not alone.

And, in one respect, this letter is a good thing. It means that the taxing agency at hand did not in fact issue your refund to someone else, and it alerts you of the fraud so you can begin taking steps to rectify it. Many are not so “lucky.”

But with the final 2013 tax deadlines behind us, we look ahead to 2014 tax return reporting and know that fraud will continue to be a concern. Here’s what you need to know if you receive that fateful letter from the IRS, and if you have, in fact, been a victim of tax ID fraud:

  1. The IRS did not issue a refund on the fraudulently filed tax return (hence the inquiry about discrepancies and verification of identity).
  2. Consider giving your accountant a power of attorney so he or she can help you through the steps. Or contact the IRS using the phone number provided in the letter.
  3. The IRS will conduct an investigation to see who filed the fraudulent return.
  4. About two weeks from making contact with the IRS, you will receive another letter from the IRS telling you what additional steps you will need to take.
  5. You will receive a PIN from the IRS so you can e-file future tax returns.
  6. You should contact your bank and credit card companies to let them know your identity has been stolen.
  7. Report the identity theft to the Federal Trade Commission at www.consumer.ftc.gov or the FTC Identity Theft hotline at 877.438.4338 or TTY 866-653-4261.
  8. File a report with your local police.
  9. Report the incident to the fraud department of one of the three major credit bureaus. But request credit reports from each of the credit bureaus, and look over the reports to see if there is any fraudulent activity.
    • Equifax – www.equifax.com; 800.525.6285
    • Experian – www.experian.com; 888.397.3742
    • TransUnion – www.transunion.com; 800.680.7289
  10. Sign up for an ID protection service. LifeLock® and Identity Guard® are two well-known services. You will need to check the messages you receive from your service to see if there is any fraudulent activity occurring.

11. Paper file your tax return. Include the LTR 5071C on the front and mail the return with the W-2s to the following address:

Internal Revenue Service
3651 S.I.H. 35 Stop 6573 AUSC
Austin, TX 78741

If you receive a notice from Ohio stating that your identity has been stolen, here are the initial steps to take:

  1. File an Ohio Identity Theft Affidavit for all individuals listed on the Ohio form. Make sure the form is notarized and include a copy of your driver’s license.
  2. Paper file your Ohio tax return; attach the W-2s and the completed Ohio Identity Theft Affidavit form.
  3. Mail the Ohio tax return to:

Ohio Department of Taxation
Tax Technical/ID Theft Research
PO Box 182847
Columbus, OH 43218-2847

Reminders
The IRS does not request sensitive information via email. If you receive a suspicious email that states it’s from the IRS, forward it to phishing@irs.gov. And if you think your tax identity has been stolen, even without receiving a letter, contact your accountant or the IRS immediately.

Read more on this topic in our Taxonomics article: “Stolen (Tax) Identity: Creative crooks are turning your taxes into their profits” and in our related blog post: "Tax Identity Fraud on the Rise: What To Do If You Fall Victim."

We want to hear from you! We encourage you to comment below on this blog post, share it on social media or contact Laura White at lwhite@cohencpa.com or a member of your service team for further discussion.


This communication is published by Cohen & Company for our clients and professional associates. Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this publication should be taken only after a detailed review of the specific facts and circumstances.