What Happens After a Fraudulent Tax Return is Filed

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Updated on Monday, June 8, 2015

Tax return check

Your identity was stolen this year, and used to file a fraudulent tax return. Maybe you found out about it when you tried to e-file your return and discovered that your Social Security number has already been used to file a return. Or maybe you found out about the fraud when a letter arrived at your house, requesting additional information for a tax return you did not file.

Of course, you took the correct steps and talked to your tax preparer or the IRS and they helped you paper file your return with IRS Form 14039, an Identity Theft Affidavit.

There is so much information about how to file your tax return if your identity has been stolen, but very little about what happens afterwards. The hype is all about getting your return filed on time, but not the process the IRS uses afterwards to be able to accept your return this year and in the future.

Consider the Timeframe

If your identity was used to file fraudulent tax return, then you already know that you had to mail in your return to the IRS with Form 14039 attached to prove your identity and to let the IRS know that the previous return filed was fraudulent.

However, when you mail your return processing takes far longer than e-filing. An e-filed tax return is usually accepted by the IRS within about 4 hours, and a refund (if applicable) is generally issued within 14 – 21 days.

A mailed return takes 7-8 weeks to be processed, and that is without the added complication of Identity Theft. This means that a mailed return with and Identity Theft Affidavit could take much longer.

Be Patient

Understand that the same tax return fraud that has affected you is affecting millions of other filers as well and that there are only so many people available to handle the situation on the IRS side. Chances are if you owe money, then waiting for your return to be processed isn’t a big deal to you.

But if you are receiving a return, then you are understandably anxious for your return to be processed. While you can call the IRS to ask them about the status of your return, I don’t recommend it if you value your time.

Instead, try visiting Where’s My Refund? – a tool on the IRS’ website that is updated every 24 hours with the status of your refund.

Approximately 4 weeks after you mail your return, you should be able to check Where’s My Refund for the status of your return rather than calling the IRS directly, as the IRS asks that you not call unless it has been longer than 21 days.

In order to check on the status of your refund, you will need the following information:

  • Social Security number, or Individual Taxpayer Identification Number
  • Filing Status
  • Exact Refund Amount

Be Prepared to Provide Additional Information

As a result of the a fraudulent return being filed with your information, the IRS will most likely need to verify more information than what is normally attached to a mailed-in return. A normal return requires you to attach your W-2’s to your return, but be prepared to receive a letter (or two!) in the weeks after you file requesting more information.

While this may seem like a lot of work for you, the IRS is just being thorough, ensuring that this time, you are who you say you are.

As with any communication from the IRS, requests will come in the form of a letter. The IRS will never call or email you without arranging it previously with you. Any calls or emails you may receive from someone claiming to represent the IRS are scams. Do not return the call or reply to the email.

Identity Protection PIN

Once you’ve submitted your return to the IRS, beyond just waiting, you need to know what happens next year. Will you still have to paper file for years? How complicated will your tax return be going forward?

Thankfully, the IRS has systems in place to protect your identity and make filing easier in the years to come.

8-12 weeks after your return is completely processed (processed, not filed), you will receive an invitation to obtain a Federal Identity Protection PIN. This 6-digit number, also known as an “IP PIN” helps to prevent the misuse of your Social Security number on fraudulent federal income tax returns. Once you receive it, you can use your IP PIN as your e-file signature PIN. You can go here to obtain your IP PIN.

Assuming you receive your IP PIN before it is time to file next year’s return, you will not have to continue to paper file your returns, but instead can input your IP PIN and e-file.

It is important to realize that once you receive your IP PIN, you cannot opt out of using it. You must use your IP PIN to confirm your identity on all federal e-filed tax returns you file this year and during subsequent years. If you choose to paper file subsequent year’s returns, filing with an incorrect or missing IP PIN could result in delayed processing of your return.

You are required to obtain an IP PIN if:

  • You received a CP01A notice (this is what your IP PIN will come in, initially, through the mail) and you lost it, or
  • You had an IP PIN during a previous tax year and you did not receive a new one this year, or
  • Your e-filed return was rejected because it was missing or incorrect.

Even if your identity was not compromised when filing your federal tax return this year, you can request an IP PIN if:

  • You filed your federal tax return for 2014 in the states of Florida, Georgia, or the District of Columbia, or
  • You received a letter or CP01F Notice inviting you to obtain an IP PIN

In order to obtain the IP PIN, you will need:

  • Social Security number
  • Date of birth
  • Email Address
  • Filing status
  • Mailing address of your most recently filed tax return

You IP PIN is obtained through the IRS’ website, which can be found here.

Common Questions

We are Married Filing a Joint Return and only one of us has an IP PIN. Does my spouse need to get an IP PIN as well?

No – if one person receives an IP PIN, the spouse does not need an IP PIN in order to file your return.

I reported to the IRS that I was a victim of identity theft but I didn’t receive an IP PIN this year. Why didn’t I receive one?

Your account may not have been resolved prior to the date the IRS issues IP PINs. However, if you:

  • Received an IP PIN last year, or
  • Received a notice in the last 12 months saying your account has been resolved and an identity theft indicator has been placed on your account, or
  • One or more of the above and you moved in the last year and did not notify the IRS, and did not receive an IP PIN this year

 You’ll need to retrieve or replace your IP PIN here, if this is the case.

Credit Protection

If you identity was compromised and used to file a fraudulent tax return, then alert the following people:

The Local Police: Be sure to take along a copy of your IRS Form 10439, which is the Identity Theft Affidavit you filed with your tax return.

The IRS: You can call the IRS Identity Protection Specialized Unit at 1-800-908-4490. Be prepared with a copy of form 14039, your police report, and a copy of your identification, such as your driver’s license.

The Federal Trade Commission: Create an Identity Theft report to help remove fraudulent information from your credit report and stop collections.

The Credit Bureaus:

  • Experian: 1-888-397-3742
  • Equifax: 1-800-525-6285
  • TransUnion: 1-800-680-7289

Finding out that your identity has been compromised and used to file a fraudulent tax return can be unnerving, at the very least.

However, the IRS has systems in place that, while they may delay the how long your return taxes to process, ensure you will receive your refund and that your identity is protected in the years to come.