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The IRS and Identity Theft: What You Need to Know

By: Catherine Kruse

Recent statistics show that identity theft more than doubled from 2019 to 2020 and the IRS has taken note. This year, a number of our clients have received “Letter 5071C” which asks them to verify their identity before their tax return may be processed. If you receive this letter, it does mean that the IRS is going to hold your refund or processing your return until they hear from you. This is also one of the few instances in which Hauk Kruse can’t handle the notice for you. 

The letters look like this:

The IRS has published many items about these letters, and they are fairly easy to take care of. You can visit this site to get started on verifying your identity. It links to the place online that you can self-verify, and it also gives you information for how to call if you feel more comfortable talking to someone on the phone. Warning: You may be on hold for a significant amount of time with that option! 

Does this letter mean that my identity has been compromised? No, it definitely does not. It just means that the IRS wants to be 100% sure when processing your return. If you do receive one of these letters, however, you might look into the possibility just to be on the safe side.

What do I do if I know that I have been a victim of identity theft? The IRS also has a good site that leads you through these options. There are multiple forms of identity theft which could apply to your tax return, and the site will offer you guidance on what to do in each particular instance.

  • Tax-Related Identity Theft
  • Data Breach
  • Employment-Related Identity Theft
  • Assigned an EIN Not Requested

If you have been a victim of identity theft or if you have received the “Letter 5017C,” please don’t hesitate to contact Hauk Kruse. We are happy to help or even just walk you through the next steps. Though we can’t verify your identity for you, we can answer any questions you might have along the way.

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