The Early Bird Gets the Return: IRS Backlogs and Tax Identity Theft

While multiple media outlets were reporting last week that the Internal Revenue Service (IRS) was over 1.2 million returns backlogged prior to the start of tax season due to the government shutdown, taxpayers should expect delays as warned. Additional delays may also be caused due to new laws related to stopping identity theft. Some delays could be two weeks to a month or more.

Expecting delays doesn’t mean taxpayers may as well wait to file their returns. Getting a tax return filed as quickly as possible can alleviate both concerns – the IRS treats tax returns on a first come first served basis, so the sooner you complete your return the sooner it will get processed and the sooner you complete your return the less chance for a scammer to beat you to your refund.

The IRS estimates it paid out $1.3 billion in fraudulent tax refunds last year. It’s a real issue that can cause more headaches than you think. If you're a victim of identity theft, you're going to have to submit documents to the IRS to get the identity issue resolved, which can be a long and difficult process. Additionally, if a criminal has the necessary material to file a fraudulent return, think about what else they could do with that information.

The IRS suggests the following steps if you might be a victim of identity theft:

• File a report with the local police.
• File a complaint with the Federal Trade Commission (FTC) at www.consumer.ftc.gov or the FTC Identity Theft hotline at 877-438-4338 or TTY 866-653-4261.
• Contact one of the three major credit bureaus to place a “fraud alert’ on your account:

• Equifax – www.equifax.com, 800-525-6285
• Experian – www.experian.com, 888-397-3742
• TransUnion – www.transunion.com, 800-680-7289

• Close any accounts that have been tampered with or opened fraudulently.

If your SSN has been compromised and you know or suspect you may be a victim of tax-related identity theft, take these additional steps:

• Respond immediately to any IRS notice; call the number provided.
• Complete IRS Form 14039, Identity Theft Affidavit. Use a fillable form at IRS.gov, print, then mail or fax according to instructions.
• Continue to pay your taxes and file your tax return, even if you must do so by paper.
• If you previously contacted the IRS and did not have a resolution, contact the Identity Protection Specialized Unit at 800-908-4490. We have teams available to assist.

If you are unable to get your issue resolved and are experiencing financial difficulties, contact the Taxpayer Advocate Service toll-free at 877-777-4778.

Now is a good time to consult a tax professional to best determine how the law affects your unique situation. John Kasperek Co., Inc. is a leading expert accounting firm in the Chicago Southland region and can be reached at (708) 862-2262 or email This email address is being protected from spambots. You need JavaScript enabled to view it..

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