Last year, it was publicly revealed that one of the major consumer credit reporting agencies, Equifax, had been hacked. As a result of this, the personal information of more than 145 million Americans was stolen, presumably for sale to identity thieves and other criminals.
This was a terrible, major breach and is expected to result in a spike of identity theft. One of the easy ways that identity thieves can exploit this information is through tax fraud.
Tax Fraud and Tax Appeals
Tax fraud is very real and there are steps that you can take to reduce your risks of identity theft. However, many taxpayers often find out too late to protect themselves. There are two primary ways that tax fraud can lead a taxpayer to seek appellate relief.
- A person uses your social security number to obtain freelance work or employment. While this might not sound like traditional identity theft, it can be a real problem. The person receives a paycheck for their work, which they take clear of any withholding or paying any estimated taxes. The business that is cutting that paycheck then files a 1099 with the IRS to report that income. Then, when it comes to filing your tax return, the IRS is aware of income that you have failed to report, since you did not know about it. This results in an audit or adjustment.
- A person uses your social security number to quickly file a false tax return with the IRS in order to seize your tax refund. Then, you try to file your tax return and it gets rejected because they already have a return on file. This is the more common scenario and really digs victims into a terrible financial hole.
While the IRS has an avenue to report identity theft, it is not an automatic or quick process. In fact, a taxpayer who has received an audit, adjustment, or other adverse IRS action may have to appeal the IRS action, and then concurrently file an identity theft affidavit while their appeal is pending. Further, the IRS may or may not accept that a taxpayer was the victim of identity theft, making the problem worse for the victim. An experienced tax attorney can help you navigate this intricate process.
Contact The Law Offices of Robert S. Thomas
If you have been the victim of tax fraud, the last thing you need is for the IRS to delay or reject your attempt to set things right. Let me help you determine whether a tax appeal is appropriate for you. I have a Master of Law Degree (LLM) in Taxation and am licensed to practice in the United States Tax Court. With over twenty years of experience in IRS taxation, I can help you exercise your legal rights. Contact The Law Offices of Robert S. Thomas at 847-392-5893 to schedule a consultation or visit our website today.