TAX FRAUD: INFORMATION AND RESOURCES

Several members of the Penn community recently reported to the Division of Public Safety that fraudulent tax returns were filed in their name. Investigations to date have shown no data breach at Penn or the Health system. These events may reflect a broader national trend, potentially linked to the large spike in data breaches over the last two years. (see http://www.washingtonpost.com/news/get-there/wp/2015/03/12/senate-finance-committee-to-hold-a-hearing-on-tax-fraud/).

If you find that you are a victim of tax fraud, take the following steps:

1. File a Police Report. File a report with Penn Police by calling 215-898-7515. You should also contact Detective Charles Boyle of the Penn Division of Public Safety at 215-898-4485. Detective Boyle is working directly with the local IRS and FBI offices on this regional and national issue.

2. Filing your taxes:

  • Respond immediately to any IRS notice; call the number provided. The IRS does not contact taxpayers via email, text or social media but usually uses written correspondence sent via the United States Postal Service (USPS.) The IRS has a website which you can use to confirm any messaging from them and report any fraudulent communications. https://www.irs.gov/uac/Report-Phishing
  • 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 1-800-908-4490, where a team is available to assist.

3. Obtain IRS-supplied PIN. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490 and ask for a “flag” or “marker” of possibly suspicious activity. You will be provided a PIN to use in future filings, which will strengthen the security on your account.

4. File a complaint with the Federal Trade Commission at www.identitytheft.gov or the FTC Identity Theft Hotline at 1-877-438-4338 or TTY 1-866-653-4261.

5. Place a Fraud Alert. Contact one of the three major credit bureaus to place a fraud alert’ on your credit records:

A fraud alert on your credit report lets potential lenders know that they should verify that it is actually you applying for credit before extending credit. There are two types of fraud alerts: a 90-day alert and an extended fraud alert, which stays on your credit report for seven years (you must provide an identity theft report to qualify for a seven year alert).

6. Consider credit monitoring or credit freeze. There are other, more protective measures you can implement for stronger protections against credit-related fraud.

  • Credit Monitoring. Each of the three credit reporting agencies sells a credit monitoring service. For about $100 annually, this service will let you know when there is new activity on your credit report, such as a new account, a closed account, an extension on credit line, and so on. The information comes to you when it is relevant, rather than you having to check your credit report yourself.
  • Credit Freeze. The strongest preventative measure is to put a freeze on your credit file, as allowed by Pennsylvania law beginning January 1, 2007. A credit freeze effectively prevents anyone else from getting credit in your name. It also, however, prevents you from getting instant credit, for example, when you are offered a discount for opening a credit card on the spot. A credit freeze costs $10, and an additional $10 to lift the freeze when you want to apply for credit or a loan.

7. Close suspicious accounts. Close any accounts opened without your permission or tampered with.

More information on identity theft can be found at: http://www.irs.gov/uac/Taxpayer-Guide-to-Identity-Theft

If you are unsure if you are a victim of tax fraud:

It may be challenging to determine if you are a victim of tax fraud. For example, the filing of an extension would not alert a taxpayer to the fact someone may have already filed a return using their SSN.

Request a transcript. The best way to know is to call the IRS (or visit and IRS office) and ask for a transcript of your account for your 2015 tax year. Then a taxpayer can know with certainty if a return has or has not posted to their account.

Obtain a “flag” and an IRS-provided PIN. Even if a return has not yet posted (which would be the ideal outcome), you may still wish to protect yourself by contacting the IRS Identity Protection Specialized Unit at 1-800-908-4490 and asking for a “flag” or “marker” of possibly suspicious activity. You will be provided a PIN to use in future filings, which will strengthen the security on your account.

Note that some taxpayers may be in a high risk group – for example physicians in the University of Pennsylvania Health System. Let the IRS know if you are in this group to facilitate obtaining this additional PIN-based protection.