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Dear Tax Talk,
I recently became the victim of tax fraud. A thief claimed my identity and received a tax refund. This refund contains taxes I owe to the government. In the case of identity theft, am I liable or will the IRS reimburse the defrauded amount? Thank you.
No, you will not be liable to the IRS or be required to reimburse the IRS the defrauded amount where identity theft occurred and a fraudulent return was filed using your Social Security number.
I am sorry to hear that this happened to you. The IRS has greatly expanded its efforts to assist taxpayers like you who have been victims of ID theft.
Because you already know that a fraudulent return was filed with the IRS, take the following steps.
What victims of tax fraud should do
- File a police report as recommended by the Federal Trade Commission.
- File a complaint with the Federal Trade Commission at www.Consumer.FTC.gov.
- Report the ID theft to one of the three major credit bureaus: Equifax, Experian or TransUnion.
- Close any bank or credit card accounts that have been subject to tampering.
- If the IRS sends you a notice, respond immediately by calling the number listed. Note: The IRS will not contact you by phone or email.
- Complete IRS Form 14039, and then fax or mail it to the IRS.
- Mail your return to the IRS if you are unable to file your tax return electronically.
- Review your earnings statement at Social Security to ensure your information is correctly reported. Go to SSA.gov for further details.
Be prepared to be patient. It may take up to four months to resolve your issue, and even longer if multiple years are involved. If it is not resolved, call the IRS Identity Protection Specialized Unit at (800) 908-4490 for further assistance. If your case is not resolved and you are experiencing financial difficulties, contact the National Taxpayer Advocate helpline toll-free at (877) 777-4778.
Thanks for the great question and all the best to you for a speedy resolution.
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To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.