By A.J. Gross
Earlier in the year, the IRS said identity thieves stole tax return information from 114,000 taxpayers. The IRS has since said the number of taxpayers affected was actually 220,000.
The IRS offers an online service to obtain tax return information called “Get Transcript.” There are two types of reports available online: Tax Return Transcript and Tax Account Transcript. These two reports provide summary tax return information. This includes social security numbers for parents and children; sources of income such as wages, investments, social security income, and pension income; Adjusted Gross Income (AGI); business income and deductions; rental income and deductions; and other vital information.
Identity thieves gained access to all this vital information using the IRS Get Transcript online service. The identity thieves first start with a stolen social security number. Then all the identity thieves need to access the Get Transcript system is the taxpayer’s stolen social security number, date of birth, street address, and zip code. With this information, the identity thieves were able to gain access to both the Tax Return Transcripts and Tax Account Transcripts. This is a wealth of information stolen and can lead to significant financial damage.
In May of 2015, the IRS said identity thieves attempted to use IRS Get Transcript online service to access thousands of taxpayer accounts. According to the IRS, the identity thieves were able to successfully gain access to 114,000 of taxpayer accounts. After further investigation, the IRS increased the number of successful attempts by identity thieves to 220,000.
The IRS believes most of the hacks occurred from thieves located outside of the U.S. So far the stolen information was used to file fraudulent tax returns claiming an estimated $50 million of refunds. The other concern is the hackers may have plans to file fraudulent tax returns during the 2016 tax season.
The IRS has taken steps to address the hacks. The steps include notifying the taxpayers affected, removing some of the online capabilities of the IRS Get Transcript service, and providing affected taxpayers free credit protection service.
If your information was used to file a fraudulent tax return, read “Taxpayer Guide to Identity Theft” available at IRS.Gov. Furthermore, I highly suggest filing Form 14039, Identity Theft Affidavit. The IRS will take corrective steps to help you in the matter. This includes providing you an IRS Identity Protection PIN that is required to be used to file future tax returns.
A.J. Gross, C.P.A., E.A. is President of ALG Tax Solutions. A.J. Gross can be contacted at AJGross@algtaxsolutions.com or www.algtaxsolutions.com
This column was printed in the September 20, 2015 - October 3, 2015.