taxes

Tax refund hung up due to stolen identity

George SaenzDear Tax Talk,
I filed my taxes in April. I tried to e-file, but I couldn't because someone stole my identity. I faxed my paper tax return to the Internal Revenue Service. I was informed my taxes were received. When I called in May, I was informed to give them three months and that someone is being assigned to my case, and I would receive a call and or paperwork. To date I have not received any correspondence or my tax refund. Please help me.
-- Ternelle

Dear Ternelle,
Identity theft is a big problem with financial transactions, and IRS tax refunds are a very tempting target for thieves. The IRS won't discuss what procedures they use to detect theft, but it's obviously not enough when you have your own identity stolen. Not only is it inconvenient, but your refund is forever delayed as well. I think the banks do more to verify your identity than the IRS does before issuing a refund.

I came across the following piece of news the other day from CNN Money.

Identity thieves often use the same address to file hundreds -- and even thousands -- of potentially fraudulent returns, the audit found. The same address in Lansing, Mich., for example, was used on 2,137 tax returns, resulting in more than $3 million in potentially fraudulent refunds, according to the report.

In fact, just five addresses were used to file nearly 5,000 returns -- resulting in a total of $8.1 million in potentially fraudulent refunds.

If you had identity theft on your 2011 tax refund, the IRS should have told you to file Form 14039 to get the ball rolling. If you haven't filled out the form, do so immediately and get it into the IRS. My experience with identity theft is limited, but the case I had took around eight months to resolve. I only found out there was resolution by calling; the IRS never acknowledged the receipt of the Form 14039 or any other indication of errors. The taxpayer wasn't waiting for a refund, so I can't give you any guidelines on what to expect as far as getting your tax refund. Good luck.

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