Identity Theft and Your Taxes

Berg Taxes

For a lot of people, the first time they learn that their identity has been stolen, it is when they file their tax return. When their preparer calls them and tells them that the Internal Revenue Service (IRS) has rejected their tax return because “that social security number has already been used to file a tax return with the IRS”.

When you electronically file your tax return with the IRS, the only information that is used to prove to the IRS that you are you, is your Social Security number and the first 4 letters of your last name.

Why are people filing fraudulent tax returns you ask? Well, several reasons that are very easy to see. With the invent of Pre-Paid Debit cards now, you can file a tax return for a refund of $5,000, have it direct deposited on a pre-paid debit card that was opened in the name of the tax return, then drain that card into cash. Do that 50 times and you have yourself a $250k salary.

How do these guys get the social security numbers and names they need to run this scam? Through more scams. Let us look at some of these scams that are being used so you don’t get hit by them.

·         IRS Scam

One of the big ones right now is the IRS scam. The IRS warns consumers of scam artists who’ve composed a sophisticated phone scam targeting taxpayers, including recent immigrants, across the country. According to the IRS, victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. They ask the victim to prove who they are by getting the victim to give them their name and their social security number.


·         Computer Tech Scam

This “artist” crafts a tale about being a representative of Microsoft or Windows and advises that your computer is infected with a dangerous virus. He then claims to be able to free your computer from the malware. Microsoft’s website lists some of the things such a scammer can do if you fall for their scheme:

§  Trick you into installing malicious software that could capture sensitive data, such as online banking user names and passwords.

§  Take control of your computer remotely and adjust settings to leave your computer vulnerable.

§  Request credit card information so they can bill you for phony services.

§  Direct you to fraudulent websites and ask you to enter credit card and other personal or financial information there.

If you get such a call, hang up. Do not pay for any service offered or provide any personal information to the caller.

·         Your Human Resource Department

This guy will do some research and find out who works in the human resource department at your office. He will wait outside and then talk to the HR Clerk and offer $200 per social security number that the clerk can give him.

If you do become a victim of Identity theft, you need to file a police report. You need to file IRS form F14039 identity theft affidavit with the IRS. You should go to the Federal Trade Commission website for help with your next steps at There are some great services out there that can help you restore your good name.

We here at BergTaxes have been doing taxes in the Clairemont/Kearny Mesa area for over 20 years. We offer free consultations regarding any and all tax matters.

For more information, call (858) 279-1040 or email

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