Filing your taxes is bad enough, but finding out that someone has filed a fraudulent return on your behalf is even worse. Hopefully, you will never encounter this disconcerting situation, but if you do, it’s important that you know what to do — and what not to do.
There are many reasons why someone might file a bogus tax return on your behalf, and each one comes with its own set of consequences. A disgruntled employee at your old tax preparation firm might access your personal information, file a return using that data, and claim the refund for their own. An identity thief might buy your Social Security number and other personally identifiable information on the dark web, file a fraudulent tax return, and run off with money that rightly should be yours.
No matter what happens or how it plays out, there are specific steps you should take if someone has violated your financial trust in this way. Perhaps the most important is to place a fraud alert on your credit file; the identity thief who ran off with your refund might also be busy applying for credit cards and taking out loans in your good name.
Once that fraud alert has been filed, it is time to do something even more uncomfortable — talk to the IRS. Dealing with the federal tax agency can be difficult, but it is important to fill out the appropriate paperwork and follow the process through to its resolution.
If a fraudulent tax return has been filed in your name, you will want to obtain form 14039 from the IRS or your chosen tax preparer. Once you have the form, fill it out and submit it to the IRS.
Once the IRS receives form 14039, the tax agency may need to verify your identity and make sure you are who you say you are. If this verification is required, you will receive letter 5071C in the mail. When you receive it, you can call the IRS at the number on the document, verifying your identity step by step through their automated system.
The timeline for resolving this uncomfortable, albeit thankfully uncommon situation will depend on a number of different factors. Those factors include the overall workload at the IRS, the complexity of the case, the speed at which you respond and verify your identity, and so on. Once the matter has been resolved, you can complete your tax filing and claim any refund you have coming.
Hopefully, you will never have to worry about someone stealing your identity and making off with your tax refund. If all goes well, you will simply file your taxes and wait for the refund. Even so, it pays to be prepared, and now you know what to do if there is fraudulent activity involving your tax return.
