An epidemic of scams and fraud have forced the IRS and several states to continue to develop safeguards and checkpoints.
Scam artists continue to contact individuals and businesses year-round demanding payment or promising large refunds (read Warning: IRS Phone Scam Continues – How to Protect Yourself; listen to voicemail example). However, a more prominent scheme during tax season is the filing fraudulent tax returns to pilfer millions of dollars in refunds. For many, the first sign of detection comes only when the IRS rejects their tax return.
To assist with this, the IRS recently launched a special web page for you to check on the status of your tax return filing. Go to www.revenue.wi.gov and click on "Check to see if your 2014 tax return was filed" under Quick Links. If you discover a tax return has already been filed in your name, and you or your advisor have not filed your tax return, your tax filings will be a bit more complicated for the next three years.
First, this year's filing will be paper-filed and sent with a completed Identity Theft Affidavit and proof of identification (social security card, driver's license, passport, etc.). If you are expecting a refund, it may be delayed up to six months. In addition, for the next three years, the IRS will issue an Identity Protection Personal Identification Number (IP PIN) that you will need to include with your tax return each year.
Now for the second punch! You are officially the victim of identity theft. It is vital that you follow the steps below to stop any further fraudulent activity and start to re-secure your personal information.
1. Access one of the three credit agencies and add an alert to your credit report. A 90 day alert is sufficient, however if you become aware of additional instances of fraud there are options to extend for longer periods of time.
o Experian - www.experian.com
o Equifax - www.equifax.com/home/en_us
o TransUnion - www.transunion.com
2. Run a credit report and review the report to see if any other instances of fraud have occurred. This would include any inquiries that you are not aware of. This is a free website you can use. You are entitled to one report from each agency on an annual basis. www.annualcreditreport.com/index.action
3. Create an Identity Theft Report with the FTC. www.consumer.ftc.gov/articles/0277-create-identity-theft-report
4. Contact the local police to notify them of the fraud. You can file a police report to be on record for future reference.
The steps listed above will simply help you triage the situation. For a more thorough guide and tips for preventative measures, please read Identity Theft: A How-To Guide to Protection, Detection & Mitigation.
John Kuehn is accounting supervisor at Milwaukee-based Komisar Brady & Co., LLP.