Beware the Ides of February: Your Identity Has Been Stolen!

It’s tax season! Beware the Ides of February! Yesterday, Janna and I were disappointed to learn someone filed a tax return in our name. We discovered this identity theft when we diligently filed our 2015 taxes online via TurboTax and quickly learned our returns had not only been rejected by the IRS, but also by the New York and New Jersey tax offices! I later learned if the Feds reject your return, the States, in turn, will automatically reject your return, too. That’s good there’s some sort of communal, emergency, trigger that is in place for this homegrown brand of unsophisticated, commonplace, thievery.

The problem with the IND-510 error —

Spouse SSN in the return must not be equal to the Primary SSN on another tax return.

— is that it is unrecoverable in that you cannot re-e-file your returns, you’re pressed back to mailing in paper returns and you are in the unenviable position of defending your true identity against those who faked theirs to impersonate you online and steal your tax return.

TurboTax was great. They offered an emergency call to share advice and strongly suggested both Janna and I report the identity theft to the IRS because error alerts are generalized and we both could be at risk. We have done so.

TurboTax also verified the faked returns in our name were not placed using their online tax filing system. If the bad actors had used TurboTax, I wonder if TurboTax could’ve thwarted them on our behalf?

Unfortunately, TurboTax’s next advice was dire with no easy or quick resolution as they directed us to IRS.gov for the next move in the process. IRS Form 14039 became our life. TurboTax told me I could call the IRS to get the federal verification process started, but quickly advised me against it in that the IRS is overwhelmed right now with tax season and they’ll just hang up the phone.

Since I had miles of forms ahead of me to fill out, I called the emergency IRS phone number and, sure enough, just like TurboTax warned me, the IRS caller robot put me on hold and then summarily disconnected me with a recorded fare-thee-well that the IRS was overwhelmed and to call back later. Click!

Democracy in process!

The States were more accommodating. New Jersey has an online tax fraud form we submitted right to the division. The New Jersey folk told me the online alert method was better and faster than faxing or mailing because it gets “immediate attention.”

New York State department of taxation was also helpful — they’re seeing a lot of identity theft this time of year — and gave me the link for filling out an online form that we faxed back to them for a hold on our accounts.

As for the Feds, the IRS is just plain unfriendly in letting us instantly alert them that we’ve been ripped off.  There’s no fax number or online submission form.  You print out the 14039 and mail it in with your tax return and then wait 180 days for a resolution.

Waiting six months instead of three weeks for a tax refund is overwhelmingly unkind. There has to be a better way to not punish the innocent! As I understand it, once the identity fraud is cleared up, the IRS will mail us a new PIN every year that we have to use to “verify” it’s really us filing our online tax returns. Getting a yearly PIN from the government does not make me feel terribly comfortable in the process of getting our tax return processed in a timely manner.

The scary part is — the people who stole our identity only needed a few bits of our person to also forge W-2 forms to get back the largest refund from the IRS. They aren’t directly impersonating our actual work record — the thieves only want enough to get in the IRS door — and the rest they forge and manufacture for the biggest jackpot.

We’ve been warned to expect future letters from the IRS asking us about W-2 income we failed to report — because those forged W-2s will have been falsely filed against our names by those who stole our identity. We were urged to place fraud alerts on all our credit bureau files. We have done so.

Everyone I spoke with tried to comfort me that this was not unusual or unexpected and to be patient and let the process play out. I was still dismayed. We have two-factor authentication employed on every available service and account. We froze our credit reports long ago to prevent any unauthorized credit accounts or loans or mortgages.

We had no idea the IRS was so easy to fool when it came to vetting an honest tax return from a fraud. I know no system is foolproof, but governments should not be foolhardy with our time or our money if they want our continued faith of service.

I, again, urge you to harden your identity — but I’m not sure what good it’ll do in the end if the biggest identity repository in the USA, the IRS, is unable to be easily, or routinely, hardened on your behalf by default.

It’s frustrating to learn the very government you are trying to serve with tax payments during the year is as yet unable to ensure the safe return of your money in a Modern Age where stealing is easier than obeying the moral law of the land.

I know the IRS eventually wants everyone to e-file and to do away with the paper trail — but I can’t imagine that happening in the next 25 years — because the IRS will have to create a bulletproof, safe, reliable and easy-to-use system of managing our taxes while protecting the integrity of our identity. Paper is the final firewall, for now, against proof-of-fraud, but once everything goes virtually digital, good luck with proving who you say you are without a DNA test!