We should all be aware by now the IRS does not call you if there is an issue with your taxes; they send tax notices and letters. But did you know there are also fraudulent “IRS” notices and letters circulating?
Many variations of fraudulent letters and notices are being mailed out with the hope of response from unsuspecting taxpayers. One recently identified letter indicated a pending audit of three prior tax years and requested contact from the taxpayer within five working days.
The letter requested the taxpayer’s Social Security Number, which would already be provided on a legitimate letter or form. It also requested some not-so-typical information such as current banking information, information concerning personal assets, current employment and the state ID or driver’s license. Items such as these are not requested in notices or letters. It had a believable IRS logo, the actual IRS website address, telephone numbers in the D.C. vicinity, and even referred to IRS Commissioner, Charles Rettig and Secretary of Treasury, Steven Terner Mnuchin.
Fortunately, this taxpayer contacted his CPA when the letter was received. Unfortunately, the reality is personal data is already out there. The IRS, in collaboration with most states, initiated the procedure of the state driver’s license information to e-file, to reduce the number of fraudulent tax returns filed. Although it is currently not a requirement by the IRS nor Indiana, some states do require it to e-file a tax return. Given this fraudulent letter requested the state ID or driver’s license number, it is likely the goal was to gain access to file a fraudulent tax return, among other things. Recent publications indicate 29.4% of the identity theft fraud is tax fraud (FTC 2016).
Would you be able to identify a fraudulent tax notice or audit letter? Some are sophisticated enough to be challenging. Tax professionals have resources to help identify fraudulent pursuits of tax information. If you receive a letter or notice contact your CPA or tax preparer before responding to any correspondence from a federal or state tax agency.