Wednesday, May 05, 2010

Millions of Tax Returns Filed Using Other People’s SS Numbers

In 2007 1.2 million people filed tax returns using someone else’s Social Security Number, according to the Treasury Inspector General for Tax Administration (TIGTA). During the investigation, TIGTA discovered that the IRS can’t identify cases of identity theft when people use Individual Taxpayer Identification Numbers (assigned to people who work and pay taxes but are not entitled to Social Security benefits) to file tax returns, and use someone else’s name and Social Security Number to work.

The issue was discovered when people using false Social Security Numbers for work had their wages garnished to satisfy tax debts of the legitimate Social Security Numbers owners!

TIGTA recommended that the IRS alert taxpayers their identity may have been compromised, match ITIN returns with their related reporting returns, such as Wage and Tax Statements (Form W-2), and most importantly, update their guidelines to handle collection issues associated with ITINs. The IRS was said to “generally agree” with TIGTA's recommendations.

Review the full TIGTA report and IRS response here.

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