Tax Scam Hits Home

In my line of work, I read many articles about financial scams. This tax season it happened in my own home.
Someone, somewhere filed a 2013 tax return with my husband’s name and social security number. The thief filed early and received a tax refund. When our accountant e-filed our joint return later in the season, she received a message from the IRS stating my husband’s return had already been filed. Great.
My husband called the IRS Identity Protection Specialized Unit (telephone 1-800-908-4490 X245). The IRS representative with whom he spoke gathered enough information to determine my husband is the correct person associated with his social security number.
The IRS rep had him complete Form 14039 “Identity Theft Affidavit,” and mail it to the IRS with a paper copy of our tax return and a photocopy of his driver’s license.
Now we wait. We need to allow 180 days for the IRS to address our problem and send any refund due. In the meantime, we still have to pay any taxes owed.
The IRS will send us a list of action steps to protect ourselves. While we wait, we took a few steps of our own:

•  Called our state’s Attorney General’s Office to report the identity theft.
• Requested a free credit report. We have already been doing this, timing the reports so we receive one from each of the three credit reporting companies every four months. The companies are: Experian.com, TransUnion.com, and Equifax.com. Credit reports are available at www.annualcreditreport.com.
• Put a security freeze on my husband’s credit at the three major credit reporting companies. With a security freeze, the credit reporting companies cannot release his credit report without his consent. These means that he will need to lift the freeze every time we apply for new loans, credit cards, insurance, utilities, jobs, etc. We decided the expense and hassle is worth the protection. There is a cost to put the security freeze on and to lift it, even for a short period. The rate you pay is set by the state in which you reside. To set up a freeze, you have to visit each credit reporting agency separately.
• . It turns out that this happened to other people that work at my husband’s company. The scammers married two of his co-workers and filed a joint return for them! The employer is now contacting its vendors, including its payroll service, to review the measures they are taking to protect its employees’ personal information.

The IRS should be taking more care in approving tax refunds. If the agency had better systems in place, it would have seen an early return in just my husband’s name does not fit his pattern.  Additionally, the IRS could wait until after April 15th to issue any tax refunds.
Have you or someone you know been a victim of tax fraud? What steps did you take?