Fed Tax E File Rejected - somebody already filed using my SS number - what to do?

[Tallman4123]

My DW and I had a fraudulent return filed in our name last year. When I spoke to the IRS fraud unit, they told me that the refund on the fraudulent return was for more than $20k and they had wired money to two separate bank accounts! Ironically, I think it's been 15+ years since we've gotten a refund...we always owe! Appears to me that the processing of returns is done in a vacuum.

Previous posters have accurately detailed the process that I had to go through. It took many hours on the phone; mostly on hold, but I will say that the IRS folks in the fraud unit were understanding and - dare I say - sympathetic regarding the situation.

I was emailing this past June with a CPA friend of mine about the situation and he wrote:

1. This is more common than you think. And the problem is much worse than people know. The IRS admits that identity theft rose 125% between 2012 and 2013. They are losing the battle. The IRS themselves told us at a seminar last week that violent crime in Miami is down because filing fake tax returns is so lucrative.

2. Of all the stories I am aware of, the damage is limited to the tax return and they don't get charge cards in your name or anything like that. However, you should get a credit report every so often just to be safe.

[Fedup]

Quote:

Originally Posted by harley Is this the case? If you owe, just file and even if someone has defrauded the IRS and gotten a refund, you don't have to worry about it? Or do you still have to go through the hassle of proving you are you? If I've paid them, and I always end up owing them, would I care if their records are wrong? How would that work?

I don't know but I thought the IRS solved this problem already because I believe the same problem happened last year.


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[foxfirev5]

If a refund is due. Would it work to submit a paper claim with the refund applied to next years taxes? Just trying to brainstorm.

[Mulligan]

Quote:

Originally Posted by robnplunder Sorry to hear that. I want to file early to avoid this issue but my brokerages kept sending me revised tax data even after Feb. One year, I had to refile b/c of this. I decided to file yesterday and they went through. Thanks goodness.

It has never caused me any problems, but I dont wait for mine. I efile first day just to beat any would be fraudulent filings. My brokerage stuff isnt too complicated, but I wing it as close as possible. This year I may have cheated myself out of a few meager bucks, but I wanted to make sure the crooks didnt beat me.
Good luck, Disappointed, with the process.


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[Sue J]

I'm concerned about this. I usually file in early February and I was planning on filing in early Feb. this year but we never got our 1095-As from Healthcare.gov. I called about this the first time on Feb.1 and they "escalated" the issue. I've called back twice and the last time they told me to give it 30 days, so I'm due to call again.

I have all the amounts that should be on the forms when they show up but I wanted to have the official ones before filing.

I don't like waiting for a huge government agency to complete a task in order to file my taxes. We have a decent refund coming.

The issue behind the 1095-As being missing is that HC.gov shows that we enrolled in a plan and canceled the next day, which is absolutely incorrect. We had insurance, and a subsidy all year. I saved the paperwork.

[gauss]

Quote:

Originally Posted by MichaelB Not my understanding. Once the victim confirms with the IRS that fraud has taken place, the process to get the lawful return filed and excess tax refunded will take months but should happen this year.

Agreed with MichaelB here. IRS has processes to handle this that they did not have years before.

You should be made whole. The difference will be made up by the taxpayers. You will not have to wait for a recovery from the perp.


-gauss

[gauss]

Quote:

Originally Posted by niven If everyone started filing early, how likely is it that a**holes bad guys would switch to sending in amended returns? Or do amended returns go through enough checks to prevent fraud?

There is no e-fling of amended returns. They are all paper filed.

-gauss

[jazz4cash]

Last year IRS informed us that they would send our refund via paper check in the mail rather than direct deposit because the bank refused to accept the direct deposit. That was before we ever filed! We always file paper returns and we usually owe so we wait until April. Ironically, I always get some sort of error when e-filing so I gave up and continued to file a paper return. Many red flags that IRS did not detect.

Our state contacted us to advise that a suspicious return was filed on our behalf and it was rejected. We always use the state's online ifile system. Gotta say the state was much sharper than IRS in detecting the fraud.

We filed the ID Theft paperwork with the IRS, provided copies of Driver's Lic, etc. and filed our paper returns as usual (30 min). No police report. No more issues with the 2014 return. They issued the ID PIN numbers for us to use for 2015.

It's crazy if they require the taxpayer to file a police report when their lax systems and procedures are the root cause of this problem. They could send the local police a report listing all affected individuals.

[Rosie]

Oh geeze, you have my sympathies.

We had a large refund coming our way this year (thanks to the ACA), and I was concerned about the increase in fraudulent filings so I e-filed our taxes via TurboTax in mid-Feb, as soon as all our tax documents arrived. Hopefully I didn't overlook anything, but I figured I could always file an amended return if need be.

The filing went without a hitch and our refund was deposited to our bank acct last week. Whew!

[Sunset]

Quote:

Originally Posted by Disappointed Just got back from the police department, they don't have anyone at the desk anymore. Need to come home and call to have an officer come to my house to take a report, learned something new today.

Are they as fast as Jimmy John's

[Sunset]

Quote:

Originally Posted by Fedup I don't know but I thought the IRS solved this problem already because I believe the same problem happened last year. Sent from my iPad using Early Retirement Forum

No worries, it's just taxpayer money.... no loss....

They should deduct $1 per fraudulent tax refund given from every IRS employee, then they would pay attention.

[Sunset]

Quote:

Originally Posted by Fermion So why not file a $1 return on Jan 1 with just your W2 info and then file an amended return sometime in March/April when you have your forms. This way your SS# will already have record of being filed. Doesn't most tax software give you like 5 free filings?

Because then the IRS will enforce the rules (since this would embarrass them) and charge you with filing a false return, since you know there is more to come.

Otherwise you could Jan 1st file an empty return, since you probably have no paperwork, and later file an amended.

[Al in Ohio]

Don't blame the IRS when the real fault lies with the identity thief. If you had a pot of gold in a private swiss bank vault and someone stole your passcode and emptied it out, would you blame the swiss bank or the thief?


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[Fermion]

Quote:

Originally Posted by Al in Ohio Don't blame the IRS when the real fault lies with the identity thief. If you had a pot of gold in a private swiss bank vault and someone stole your passcode and emptied it out, would you blame the swiss bank or the thief? Sent from my iPhone using Early Retirement Forum

The problem is, the IRS is like a bank with no passcode or even a realistic check for ID.

I blame both, but mostly the IRS. I can vote with my feet on the bank and bank elsewhere. I can't choose which entity to pay my USA taxes.

[Al in Ohio]

They do. Its called your SSN. That's your passcode. Some get stolen. Blame the thief who stole it. And if yours has not been compromised, protect it the best you can. Besides the thief, you might next turn your scorn to medical records holders etc that know your code, and fail to keep it secure.


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[Fermion]

Quote:

Originally Posted by Al in Ohio They do. Its called your SSN. That's your passcode. Some get stolen. Blame the thief who stole it. And if yours has not been compromised, protect it the best you can. Besides the thief, you might next turn your scorn to medical records holders etc that know your code, and fail to keep it secure. Sent from my iPhone using Early Retirement Forum

Again, if my bank made me use a 9 digit code for my password and would not let me change it for 45 years (so far), I would switch banks.

[Gone4Good]

Quote:

Originally Posted by Al in Ohio Don't blame the IRS when the real fault lies with the identity thief. If you had a pot of gold in a private swiss bank vault and someone stole your passcode and emptied it out, would you blame the swiss bank or the thief?

I blame the thieves first and foremost. But if the Swiss bank vault door is left swinging open with nary a guard in sight I'm going to blame the Swiss bank too.

It's asinine that the IRS isn't staffed well enough to be able to do even cursory check of of corroborating documentation before releasing refunds. Seriously, they have all the information we have. There's no reason this kind of fraud should happen ever.

[meierlde]

Quote:

Originally Posted by Gone4Good I blame the thieves first and foremost. But if the Swiss bank vault door is left swinging open with nary a guard in sight I'm going to blame the Swiss bank too. It's asinine that the IRS isn't staffed well enough to be able to do even cursory check of of corroborating documentation before releasing refunds. Seriously, they have all the information we have. There's no reason this kind of fraud should happen ever.

One way to eliminate a good bit would involve delaying refunds until w-2 and 1099s are in the IRS hands (March 31). Then you could compare returns with the info gathered But that would likely mean that refunds would start coming out in may, and that would inconvenience many folks.

[Gone4Good]

Quote:

Originally Posted by meierlde One way to eliminate a good bit would involve delaying refunds until w-2 and 1099s are in the IRS hands (March 31). Then you could compare returns with the info gathered But that would likely mean that refunds would start coming out in may, and that would inconvenience many folks.

I think that's a great idea and it shouldn't be any inconvenience at all. Those folks just need to stop withholding so much and stop looking at refunds as found money. I know that's a lot to ask for but

[harley]

Quote:

Originally Posted by Al in Ohio They do. Its called your SSN. That's your passcode. Some get stolen. Blame the thief who stole it. And if yours has not been compromised, protect it the best you can. Besides the thief, you might next turn your scorn to medical records holders etc that know your code, and fail to keep it secure.

And what about the fact that the IRS systems get hacked over and over, allowing the SSNs and the pins and all other required information to be accessed and sold. I worked in network security in a large megacorp, and we were much more diligent in protecting our customer information than the IRS seems to be. They should have the most secure systems of any organization, perhaps other than the military. They aren't even trying.