Is Your Client a Victim of Identity Theft?
June 2009 - In April 2009, the IRS released a new form for taxpayers who have experienced, or are at risk of harm from, identity theft. Form 14039, IRS Identity Theft Affidavit, is used to report identity theft to the IRS. While we do not have a similar form, we do have internal procedures to help victims who contact us. First and foremost, we want the taxpayer or their representative to contact us as soon as they think something is wrong with their tax account, regardless of whether it was ID theft or not. When a taxpayer receives an FTB notice e.g., billing, refund reduction, e-file rejection that a taxpayer/victim believes is attributable to identity theft, their contact is given priority handling. We then focus on the following issues for the taxpayer:
- Ensure the victim is held harmless, i.e., they get their full and correct refund.
- Minimize the burden on the victim in resolving their identity theft-related tax problem.
- Minimize the time to resolve the case, usually within two weeks to two months depending on the complexity.
We can also flag the account to block the automated processing of tax returns to a victim's account. Anything that comes in after we flag an account would be manually processed for verification. We limit use of this specifically designating ID theft contacts flag.
The sooner the ID theft is reported, the easier it is to get the taxpayer’s account back in order. Remind your clients that if they suspect something is wrong with their tax account or if they have been a victim of ID theft to let you know, so that you can make the proper notifications.
For more information about how identity theft may affect your client’s tax records, go to ftb.ca.gov and search for identity theft.