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IRS Issues Additional Guidance on Reporting Identity Theft

On April 6, 2018, the IRS issued a release regarding when to file Form 14039 to report tax-related identity theft and when to take other actions. The IRS indicated that in the vast majority of tax-related identity theft cases, there is no need to file the Form 14039. The Form generally only should be filed:

  • if the taxpayer attempts to file an electronic tax return and the IRS rejects it because a return bearing the taxpayer’s Social Security number already has been filed; or
  • The IRS instructs the taxpayer to file it.

The IRS continued that in most cases of tax-related identity theft, the IRS first identifies a suspicious tax return, pulls it for review, sends a letter to the taxpayer (generally Letter 5071C, Letter 4883C, or Letter 5747C), and will not process the tax return until hearing back from the taxpayer.

Fact Sheet FS-2018-6 [link: https://www.irs.gov/newsroom/when-to-file-a-form-14039-identity-theft-affidavit ] provides additional information on how taxpayers may protect against identity theft and what steps to take if they think they may be victims of identity theft.

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

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