A word to the wise...

Dave H (MI)

Well-known Member
For those that do not know it already, I am a CPA with a tax practice that I run in the frigid months when tractor related activities are not so appealing.

This past week we have had no less than three clients come in with varying levels of identity theft and all from different sources. In all cases the social security number is being used to file a fraudulent tax return in an attempt to get money out of the government. We discover this when the return is rejected for e-file because another return was previously filed OR, as happened today, taxpayer received a letter from the IRS saying their return was being held...except we had not filed it yet. Not a lot you can do to stop this except be as vigilant as possible about who you give your personal information to.
 
I wish somebody would file mine. I owe a pretty good chunk of change. It's less than $10,000,but it's getting back up there to more than half of what I was paying in even the best years when I was milking cows.
I'd like to see the look on somebody's face if they tried to file and saw what I (they) owed. lol
 
Yeah, but for those of us self-employed, Anthem was the second largest health insurer in the US. They proudly said credit card numbers weren't included, but they gave up SS numbers, dates of birth with full legal name, health records, street addresses, and income records.

That's for the two of us and 79,999,998 others.

They're covering theft remediation and early warning for two years. Grrrrr.......
 
I ordered forms the beginning of Feb.(mostly for the instructions.) Some had been updated about two days prior! I gave up waiting and started in, and finished up this morning. The bulk of the forms came today in the mail.
 
Maybe you need a better accountant?

If I understand correctly, what they are actually doing is filing for high end credits like the EIC and such that are refundable. Direct deposit and run. You get your original tax bill, a lot of headaches and paperwork, plus the right to file your taxes the old fashioned way...USPS.

I cannot express enough how extraordinary it is to have three in one week. Let's just say that is evidence that this is going to be a HUGE problem down the road for the IRS. And yes, the insurer named in another post was responsible in one of the cases.
 
So the way you describe it putting a freeze on your credit report from the three agency’s would not do any good or would it.???
 
The IRS does recommend that you contact one of the big three reporting agencies. Contacting one will supposedly create a report on all three. The reporting agencies tell me that the alert is temporary unless you make a police report. I cannot tell you that the IRS does a credit check before issuing refunds. I am inclined to doubt it, but stranger things have happened.
 
Why do they say, a word to the wise?
If they are wise, they don't need a word.
If they are foolish they need the word.
 
You will be fine on e-file as things stand now. I doubt there is a safer way to get your personal info into the IRS computer. Add direct deposit to a small savings account or checking and you are probably about as safe as it gets. Paper in a mail truck is my least favorite way to have information transmitted.
 
I don't know. I made a comment about brass monkeys last week and someone caught that one and explained it. Maybe someone will help you out on this? I spent half my life doing tax returns for a lot of people older than me. I have more old cliches than you can shake a stick at.
 
TV station in Minnesota did a report on that a week or 2 ago.

People file a fake tax return that shows a pretty good refund, and the gov sends out the refund.

Real person is left with the mess of straightening it out.

The bottom line ended up being not much you can do about it; th govt refunds your money before they go through the return, only way to really clear it up would be to hold refunds until they go through the return, and if they did that we'd create a new Boston Tea Party so they have to think on it a while.....

Paul
 
This oft-used idiomatic expression makes more sense when stated in its entirety: "A word to the wise is sufficient." Rather than cite the entire thing, Dave H opined that an ellipsis (...) to the wise would be sufficient.
 
I guess there is something to be said about not getting a return. I have to pay quarterly.

So if I got hacked, would someone else pay my quarterly taxes?

I wish the government would take a more active role in identity theft.
 
Dave,
Is there a place I can buy replacement parts for my brass monkey? Or should I sent it to a vet and have him change it gender?

Do you know what it's called when your brother becomes your sister? He your trans-sister.

I've heard there is about a million people who didn't buy insurance. How much of a penalty will they have to pay?
 

I thought there was a law that said the SS number can not be used for ID. Isn't that what the gov is doing when they use the SS for a tax payer ID number?
 
Gee, maybe the government should allow everyone with a real social security card register their permanent address with the agency, and only mail any refund to that address. I have never understood how these crooks can steal ones identity and not be using their actual address. Of course, they also need to make address changes much harder to complete, like in person with matching photo id to what is currently on file.
 
Dave: I think what needs to happen here is in some form the IRS needs to issue a pin number. Which would make it much harder for scammers to do this!!! Kind of like double passwords.
 
The penalty, per my understanding, is $95 for each adult and $47.50 for each child, but not more than $285 total per family. This is a 2014 amount, 2015 will be higher. I believe I had an e-mail from IRS about some possible first year waivers but no sure on that. The thing is, no one has come in here so far this year who did not have insurance. So I am reciting from "book learning" on this topic as opposed to experience. Experience leaves a more lasting impression. Once I get a couple in, I will look into the waivers and then I will have a better idea.
 
They do that for preparers. If you can imagine, 20 years ago EVERY tax for that left this office had MY social security number on it. Now I have a PTIN. Still...there must be a few of those old returns floating around. Personal security these days more resembles a game of roulette than a science.
 
I have worked WITH, not FOR, the government for around 30 years. All the headaches, none of the benefits. The last thing I want is to have them more involved with anything in my life.
 
Local cpa's are making a big deal on TV about how important it is to have them do their taxes because of health care.

I'm using a cpa I went to college with. He retired after working for state board of accounts all his life. Should say forced retirement.

He has always done work on the side too.

$285/year tax, won't pay for one month of premiums for a family.
 
Ohio is doing seemingly random (maybe not however) verification of e-filed returns. If you get flagged they send a letter with instructions to go on-line to take a quiz. If you file jointly, both of you have to take a separate quiz. You have to pass with 3 out of the 4 questions correct. They use info they have in their state files and NOT just tax info... our quiz included info from the motor veh. department and real estate transactions and taxes, as well as old Federal tax returns. Not hard questions and it is multiple choice (and "none of the above" is a favorite choice) but I had to scramble to find an answer for one, there is a time limit. If you flunk you get to take it again, if you still don't pass you have to contact them. A girl I work with failed twice and called them and they let her take it over the phone. It's a little scary that they know all these facts about us in one agency... like an Ohio NSA!

We passed and the refund is on its way.
 

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