16794969011_2f725f6553_hHOW TO DEAL WITH IDENTITY THEFT

Quite often, the first indication you are a victim of identity theft is when you file a tax return only to find out a return has already filed under your name. Another common scenario is when you hear of a business (or the government) being hacked. Of course, you were a customer of the business, and the company’s records held your personal information.

At this point, you are faced with the question: What should I do? This is where I found myself last spring, as a former federal employee, after the federal government was hacked.

Unfortunately, once a thief has your information, you have to assume that the risk of it being used will never go away. When you find yourself in this situation, you have several options:

  • Ignore it and hope nothing happens. Not the safest option.
  • Use a credit monitoring service. Historically, these services only let you know of problems after the fact.
  • Place information on your credit files to let creditors know your identity has been stolen. These actions establish a record of the theft and warn creditors to verify the identity of the person they are dealing with. These actions are discussed below.
  • Purchase a service to detect suspicious credit activities, alert you of these issues, and restore your identity if needed. These services currently cost approximately $100 per person, per year.

 

 

IDENTITY THEFT & CREDIT FILE ACTIONS

Once you have been victimized, taking the following actions will help you deal with the existing problems and try to minimize the risk of further damage:

  1. File an Identity Theft Affidavit (Form 14039) with the IRS. This helps the IRS authenticate the correct return. In addition to filling out the form, you must do the following:
    • Include proof of identity with the form:
      • Driver’s License, or
      • Social Security Card
    • File the Form 14039 as described in the instructions based on the situation.
  2. File a Police Report. In Omaha, phone 402-444-5818 (Omaha Police Department) or 402-444-4597 (Victim Assistance Unit).
    • Explain that you are a victim of identity theft, and you would like to file a police report;
    • In 2 to 3 weeks, the Omaha Police Department will issue you a letter. This letter serves as the Police Report.
  3. Request and Review a copy of your Credit Report at:
    Annual Credit Report.com– Home Page or https://www.annualcreditreport.com/index.action.  From this link, you can get free copies of your credit report from each of the three credit bureaus every 12 months. It is recommended to review your credit reports every year.

    • Call the companies related to any questionable accounts or transactions found. Discuss the questionable accounts or transactions. The account numbers for compromised accounts should be changed. Fraudulent accounts should be closed.
  4. Place an Initial 90-Day Fraud Alert on your Credit Report:
  5. Place an Extended Fraud Alert on your credit report (Lasts for 7 Years) at:
    Fraud Alert 7– Equifax or https://www.alerts.equifax.com/AutoFraud_Online/pdf/Fraud_Alert_7.pdf

    • Fax or mail supporting information:
      • Police report,
      • W-2
      • Driver’s license,
      • Pay stub.
    • Fax:  888-826-0597
    • Mail:  Equifax Information Services LLC
      PO Box 105069
      Atlanta, GA  30348-5069
    • Note:  The Initial and Extended Fraud Alerts do not affect your credit store. However, they will slow down credit approvals including Instant Credits for a cell phone or at a retail store.
  6. File a complaint with the FTC at:
    ftccomplaintassistant.gov/GettingStarted?NextQID=1&Url=%23%26panel1-2#crnt,

    • Or, call 877-438-4338.
  7. Get an IP PIN to file future returns with the IRS:
    https://sa.www4.irs.gov/irfof-efp/start.do;jsessionid=ThYIm745c9P205ao7mdG9QIg

    • Once an IP PIN is issued, other people are not able to file a return using your name and SSN without the IP PIN.

By taking these steps, you should be in a better position in the event someone extends credit to an identity thief. You have documented you were a victim of identity theft, which helps refute fraudulent charges. These steps should also help shift the liability for fraudulent charges to creditors since a fraud alert was on your credit report. Either the creditor ignored the alert or failed to look. In either case, the creditor would appear to be negligent.

OTHER CONSIDERATIONS

Other people listed on the return or an account:

If your information was stolen from a tax return, it is possible the other people listed on the return (spouse & dependents) are also at risk of identity theft. The same protections would be recommended for them as well.

Social Security Administration:

If you have done all you can to fix the problems resulting from misuse of your Social Security number and someone still is using it, a new Social Security Number may be requested. You may contact the Social Security Administration at:

800-772-1213, or
www.socialsecurity.gov

The downside to this option involves associating any Social Security Benefits earned under the old SSN with the new SSN. There is also any number of other items with historical information associated with the old SSN such as: Driver’s license, professional license, etc.

These actions do involve a certain amount of effort. However, it is much less strenuous than trying to deal with multiple creditors and fraudulent accounts after the fact.

[Photo credit: Got Credit license]


Ray ThomasRay Thomas, CPA specializes in representing individual and business clients with IRS issues including Audits, Notices, Collection, Employment Tax, Appeals, and Offer-In-Compromise.  Ray joined Hancock & Dana in 2014 after a 26-year career with the IRS as a Revenue Agent and manager.  This background provides a unique understanding of how to resolve and prevent issues with the IRS.

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