IRS Issues Updates To The Identity Verification Process

IRS Issues Updates To The Identity Verification Process

In response to the increasing problem of tax theft, the Internal Revenue Service (IRS) monitors tax returns for fraudulent activity. The most common fraud occurs when a fraudster uses the person's social security number and name to file a fraudulent statement and steal a tax refund. When the IRS suspects that a return is fraudulent, the agency will request verification of the identity of the person whose name and address appear at the time of return. Here is how to resolve these requests.

If you want to create or access online payment plans with the Internal Revenue Service (IRS), consider some significant changes. The IRS has recently updated its identity verification process to protect tax information better.

An installment contract is an option for taxpayers who cannot fully pay the tax bill. As a general rule, a structured payment agreement should be required if it takes more than 120 days (approximately four months) to pay the outstanding balance.

If you owe $50,000 or less in taxes, fines and interest combined, you can apply for a payment agreement online.

To apply online, you only need:

  • The name and address on the last tax return
  • E-mail address
  • Birth-date
  • Status of presentation (single, family member, declaration of marriage, marriage declaration or widow's declaration that meets the conditions)
  • Social Security Number (SSN) or Individual Tax Identification Number (ITIN)

You still need this information, but you must now do more. Accurately, you must verify a financial account associated with your name or a registered mobile number on your behalf.

  • To view a financial account, you must have a credit card (not an American Express card, debit card or business card), student loans, home equity loan, mortgages, auto loans or lines of credit. The IRS will use this information only to verify your identity. Your card will not be charged, and the IRS will not have access to your financial information.
  • To authenticate using a mobile phone number, your phone in your name must be able to receive text messages and should be based in the United States.

If you do not have any of these, you can ask the IRS to send you a verification code. The IRS says it should wait between five and ten business days for the code to arrive.

If you already have an account for an online payment agreement or one of the other IRS tools, such as "Get Transcript", you can log in with the same username and password. You must always check your account with additional information.

These security measures are designed to protect your personal and tax information. Please note that the IRS will not send the transcript of the email or delivery contract or direct you to a site other than the official IRS website.

What Is Letter 5071C?

If the Internal Revenue Service suspects that a tax return bearing your name could result from identity theft, the firm will send you a special report called Letter 5071C. This letter warns you that the agency has received a tax return with your name and social security number and thinks it does not belong to you. The letter asks you to take definite steps to validate your identity and confirm that the return is yours.

How Can I Carry Out The Verification?

The Internal Revenue Service offers only two methods to verify your identity:

  • Online at the Internal Revenue Service Identity Verification Service website
  • By phone at the number listed on the Freephone number in the letter 5071C sent to you.

Only those who receive a letter 5071C must use the verification system. The letters are sent to you by American mail. They are never sent by email, and the IRS does not initiate a phone verification request.

The IRS prefers taxpayers to use the online system; because calls may be delayed because of the high quantity of phone calls received by the IRS. The phone number provided in your letter can only be used for verification purposes, not for other tax issues.

How Will I Be Directed To Verify My Identity?

The website or the Internet identity system asks questions that only you can answer correctly. What you will need:

  • The income statement of the previous year.
  • Tax declaration for the current year.
  • All supporting forms and schedules.

What Follows Once The Verification Is Complete?

If the check indicates that you are the one stated in return and that you have personally submitted the return, the return will be processed. Once the verification is done, the treatment takes about six weeks.

The return will be rejected and will be investigated as identity theft/tax evasion if:

  • The verification does not confirm your identity, or you have submitted it.
  • If the verification method is not finished or cannot be completed

Respond to all requests from the Internal Revenue Service to validate your identity to avoid the automatic refusal of what could be an actual tax return.

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