Employment-Related Identity Theft and the IRS!
Identity theft has so many ways to rear it’s ugly head and and it has, over the years, found its way into the employment sector.
Having known people who have fallen victim to this type of debilitating scam I decided to look to see how that can affect a person’s taxes and what the IRS either has done or is doing to counter or at least make the victim aware.
Well I found that the IRS does not currently notify taxpayers it identifies as victims of employment-related identity theft, nor has it established an effective process to ensure that it sends the required notice to the Social Security Administration (SSA) to alert the SSA of earnings not associated with a victim of employment-related identity theft.
These are two significant findings in an audit report by the Treasury Inspector General for Tax Administration (TIGTA). Employment-related identity theft occurs when someone uses the identity of another person to gain employment. So, taxpayers may first realize that they are victims of this type of crime when they receive an IRS notice of a discrepancy in the income they reported on their tax return. The IRS’s Automated Underreporter (AUR) program identifies such discrepancies when it matches taxpayer income reported on third-party information returns (e.g., Form W-2, Wage and Income Statement) to amounts that taxpayers report on their individual income tax returns.
The TIGTA conducted this audit to evaluate the IRS’s AUR processes to identify and assist victims of identity theft. During the period February 2011 to December 2015, the IRS identified almost 1.1 million taxpayers who were victims of employment-related identity theft. In April 2014, the IRS started a pilot initiative to begin notifying taxpayers that they may be a victim of employment-related identity theft. The TIGTA’s review of the pilot notification initiative found that the IRS did not sufficiently design the pilot to include a representative sample of employment-related identity theft victims. Furthermore, the TIGTA found that the IRS has not established an effective process to ensure that it sends the required notice to alert the SSA of earnings not associated with a victim of employment-related identity theft.
If you would like to read the full report you can access it here => www.treasury.gov/tigta/auditreports/2016reports/201640065fr.pdf.
Do you think that budget cutting of the IRS has made this agency laggard in being pro-active in this ongoing fight?
If you ever receive a notice from the IRS (or even the State) don’t go it alone. Don’t wait….Time is of the Essence. Give Solid Tax Solutions a call at (845) 344-1040. We are available year-round.
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Bruce – Your Host at The Tax Nook
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