IRS Letter - return not filed yet

[DougO]

Has anyone seen a letter from IRS asking whether the taxpayer has filed a Form 1040EZ - and a box to check that says "NO-I did not file this tax return".  Goes on to request you call them or fax them further information.

Letter is not a notice but shows  "OMB Clearance No.  1545-0074"  and reference "Ltr 12C" at the top of page one.  Return fax address is to "Attention:  ICO Rejects Team  -  AUSPC"    FAX #  855-204-5020.

 

My client has not filed their return yet but does have significant estimated tax payments made during the year that I am concerned about.  It sounds like someone, who has obtained a valid SS # in this case, may be filing a false return trying to claim refunds.    Client has attempted to contact the IRS but ends up with "due to the high volume of calls, we cannot help you at this time, please call back".

 

We should have this return ready for efile by end of the week and most likely will have overpayments that are planned to be applied to 2015 estimated taxes.    Any suggestions on what else we should due at this point would be appreciated.

 

 

[Margaret CPA in OH]

I have a client that received a similar letter for Form 1040.  They confirmed stolen identity via phone call but said were on hold for over an hour.  Apparently this is rampant this year.  Like you, we had not yet filed.  IRS gave an address to mail return as efile won't work.  I think the client will have to go online or call and confirm identity. 

 

There was a great discussion about this just recently and some wonderful folks here provided wonderful links on irs.gov but googling first.  If I can find the discussion I will try to post it.  It really helped my clients....and me!

[Margaret CPA in OH]

The title is IRS Identity Clarification March 2.  I don't know how to insert the link here but should be easy to find scrolling back a couple of pages.

[DougO]

Will check it out.   Client now also tells me that he at least got an "electronic filing pin" number.   So interested to see what that brings.    Thanks for your input. 

[SaraEA]

It appears that this notice is the result of what IRS's identity theft unit learned last filing season. One of our client's 2013 return efile rejected because his SS number had already been used. He sent in the Identity Theft Affidavit, called the IRS etc. Shortly thereafter he received a notice from the IRS that their records showed $187,000 in estimated payments that he hadn't claimed (and really did pay) so they were increasing his refund by that amount! We immediately faxed a note to NOT refund that amount, this was an ID theft case. That went to another unit that didn't know what the ID theft unit was doing, so he got more correspondence. To this day we don't know if the crook received a big bonus on that bogus return.  The IRS did assure the client that his estimated payments would be credited to his account.

 

This year we've seen one of the notices like DougO's asking if the taxpayer really filed the return.  The IRS apparently realized that people don't just forget that they made $187k in estimates.

[North Idaho Rich]

We've had 2 in the last 3 days.

Probably more to come as time goes by.

[Jack from Ohio]

These letters from the IRS indicate activity on the taxpayers SS#.  Instruct your clients to call the number on the letter immediately.  No other action is proper.

[KEYWEST_RICKS]

would you file a form 14039 on this?  also contact credit bureau?

[Margaret CPA in OH]

My clients were told by IRS that the earlier tax return was deleted and followed their recommendations on notifications: Federal Trade Commission, local police report, Social Security Administration, and Equifax Credit Bureau. They also filed Form 14039 and cancelled credit cards.

The address they are to send their return is:

IRS

Taxpayer Protection Program

Stop 6579 AUSC

Austin TX 78741

[Jack from Ohio]

would you file a form 14039 on this?  also contact credit bureau?

The client should call the IRS and follow their specific instructions.  Each person may have different situations.  Painting broad brush strokes of what steps to take is not a good policy for this situation.  Only file form 14039 if instructed by the IRS.

 

Contacting the credit bureaus and freezing their credit is a very effective way to stop unauthorized people from opening accounts in their name.

 

However, this letter only indicates that the SS# has been compromised.  No indication that total identity theft has happened.  Our tax filing system is so very simple to fraud with just a SS#.

[SaraEA]

Jack, in some of the IRS resources on identity theft it states that taxpayers should attach the 14039 to the front of their paper filed return if it rejected because the SS number had already been used. That's what I've done this season--attach the 14039, then the 8948 (explaining why the return wasn't efiled with the reject code entered), then the paper return.  If you learn about the other return filed with your SS from the IRS before you even try to file, then you file the 14039 where they instruct you to do so.

 

Perhaps the agency is learning on its feet and decided it made sense to get the 14039 upfront to avoid all the back and forth correspondence we had to do last year.  Something has got to change to make it harder for identity thieves to steal from the gov't and create huge headaches for taxpayer victims.

[Jack from Ohio]

Jack, in some of the IRS resources on identity theft it states that taxpayers should attach the 14039 to the front of their paper filed return if it rejected because the SS number had already been used. That's what I've done this season--attach the 14039, then the 8948 (explaining why the return wasn't efiled with the reject code entered), then the paper return.  If you learn about the other return filed with your SS from the IRS before you even try to file, then you file the 14039 where they instruct you to do so.

 

Perhaps the agency is learning on its feet and decided it made sense to get the 14039 upfront to avoid all the back and forth correspondence we had to do last year.  Something has got to change to make it harder for identity thieves to steal from the gov't and create huge headaches for taxpayer victims.

The taxpayer should contact the IRS first.  I have had 10 of these so far at the firm this year.  Any other course of action causes confusion and more work.

 

As long as Americans use the tax refund as a savings plan and want their refunds immediately, the fraudsters will have free reign.  Till the mindset of the American public changes and becomes more intelligent, the problem will always exist.

Edited March 13, 2015 by Jack from Ohio

[KEYWEST_RICKS]

I submit that to help stop fraud......

 

efile on your own should be eliminated. 

 

must use lawyer, cpa, enrolled agent etc to transmit even if the return was individually prepared.  

 

do away with turbo tax filings.

 

seems like job security to me....... is anyone with me on this???????????

 

of course they would have to include some type of credit on the return to cover the fee for low income.....

 

cmon.... i think i am on to something here!!!!

[Margaret CPA in OH]

Probably no one would go for this - permit tax return filing only after all information forms have been received by IRS. So It may be May or June before filing can begin and NO refunds without matching first. For Schedule C filers with estimated payments, no refunds, only application to next estimated payment. Harsh but I think it would make at least a dent in this and prevent a lot of CP2000 letters and replies.

[Jack from Ohio]

I submit that to help stop fraud......

 

efile on your own should be eliminated. 

 

must use lawyer, cpa, enrolled agent etc to transmit even if the return was individually prepared.  

 

do away with turbo tax filings.

 

seems like job security to me....... is anyone with me on this???????????

 

of course they would have to include some type of credit on the return to cover the fee for low income.....

 

cmon.... i think i am on to something here!!!!

 

Probably no one would go for this - permit tax return filing only after all information forms have been received by IRS. So It may be May or June before filing can begin and NO refunds without matching first. For Schedule C filers with estimated payments, no refunds, only application to next estimated payment. Harsh but I think it would make at least a dent in this and prevent a lot of CP2000 letters and replies.

Great ideas, but:

 

As long as Americans use the tax refund as a savings plan and want their refunds immediately, the fraudsters will have free reign.  Till the mindset of the American public changes and becomes more intelligent, the problem will always exist.

[Margaret CPA in OH]

Yes, I am sadly aware that too many people use the refund function as a forced savings account. The biggest issue, I think, is that our do-nothing congress will not be responsible enough to address this issue through law. It's costing the country billions to keep doing the same thing over and over with tweaks around the edges and increasing code complexity while cutting enforcement funding.

I often joked that tax reform was job security. Not so funny any longer.

[Jack from Ohio]

Yes, I am sadly aware that too many people use the refund function as a forced savings account. The biggest issue, I think, is that our do-nothing congress will not be responsible enough to address this issue through law. It's costing the country billions to keep doing the same thing over and over with tweaks around the edges and increasing code complexity while cutting enforcement funding.

I often joked that tax reform was job security. Not so funny any longer.

The Congress will not change it because if they do, they will not be re-elected.  Politics at its finest.

[Margaret CPA in OH]

Sadly that is the case all around. Do what gets you re-elected, never mind the good of the country or the people. 'It's all about me.' Politics at it's worst, too.

[Cathy]

The ONLY reason IRS is being proactive on identity theft is because they got "crawled on the carpet" about sitting back and only going after those who committed identity theft many, many times. Each of the steps they recommend are vitally important if a taxpayer is seeking a quick resolution to their case...and who isn't?

[OldJack]

Its time personal federal income tax was repealed and replaced with some other revenue source.

[SFA]

I think I would suggest that the client ask for a refund of the overpayment and not "apply to 2015." Then after feeling secure that the SS # is not compromised for future transactions, make estimated payments for the year 2015.

[lindakay]

The general public is not even aware of how these crooks manage to defraud the government.  I've been explaining it to my clients this year -- and last year, too -- and they are all shocked that the IRS is sending large refunds out before the W-2 info is even keyed into their computers, and that these crooks can just fabricate any info they want and get paid billions based on their fabricated W-2s.  I think if there was enough public awareness (by "enough" I mean a LOT -- maybe more than is possible), it may even be possible to put enough pressure on congress to get this crazy thing stopped.  

[Jack from Ohio]

The general public is not even aware of how these crooks manage to defraud the government.  I've been explaining it to my clients this year -- and last year, too -- and they are all shocked that the IRS is sending large refunds out before the W-2 info is even keyed into their computers, and that these crooks can just fabricate any info they want and get paid billions based on their fabricated W-2s.  I think if there was enough public awareness (by "enough" I mean a LOT -- maybe more than is possible), it may even be possible to put enough pressure on congress to get this crazy thing stopped.  

And unicorns make good pets!

 

Never gonna happen in our lifetime.

[Lion EA]

Schedule C and a couple of kids, big refund, no waiting.

[Gail in Virginia]

Hey America - Get Your Billions Back!