NOTE: I wrote this post in 2013, so be aware of its age.
I’ve been telling the story of Wendy Boka and the identity theft nightmare she’s going through with the IRS. Her husband Brian died at age 31 in 2010. Someone stole his identity and filed a fraudulent tax return in his name.
The IRS still has not processed Brian and Wendy’s final joint tax return for 2010.
Brian and Wendy were native Iowans. After Brian died, Wendy — a widow at age 29 — moved to Texas. The names are real and are used with Wendy’s permission.
You can read the other parts of this series here: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11
A fellow practitioner asked me the following question, regarding identity theft: if a client is the victim of identity theft, and the practitioner has power of attorney, is it okay for the practitioner to pull a transcript on the fraudulent return that was filed in our client’s name?
For example, would it be okay for me to use IRS e-services to pull a transcript of the fraudulent return filed in Brian’s name?
The thought of doing this has crossed my mind, but honestly, I’m too scared to try doing it. And my gut tells me that it’s probably not okay — and I’m not certain that the e-services system would even have the fraudulent return available to pull, anyway.
In December 2012, Wendy received a letter from the IRS that said the IRS had “recently became aware” of the identity theft issue on her and Brian’s 2010 tax return (“recently,” as defined by the IRS, apparently means “20 months later”). The last line of the letter says the following:
Disclosure laws prohibit us from revealing information about any individual using your SSN….
I’m not sure what information could be gleaned from the fraudulent return anyway. An address, maybe? Or a bank account number?
But if a thief puts their address or bank account info on the fraudulent return, wouldn’t the IRS be able to quickly catch the thief? (Okay, since the IRS can’t even mail checks to the right address, maybe I’m giving them too much credit.)
But seriously, if a thief is telegraphing their location and bank information, the IRS shouldn’t have such an awful time handling these cases. Should they? So again, I’m not sure that the fraudulent return would really contain anything useful or not.
Wendy, an attorney by training, has wanted to know if she’ll get the chance to confront the creep who stole Brian’s identity. It’s unlikely that she will. What I’ve heard informally from ex-IRS employees is, it’s doubtful the IRS will ever even catch the creep, let alone Wendy being told who it is.
So that leads us back to the question posed in the opening paragraph. Is it okay for a practitioner to pull a transcript of the “false” tax return?
My initial reaction is to say no, but I’m curious to know what other people think.
Join the discussion and tell us your opinion.
I don’t know if it was since superseded, but you should look at PMTA 2012-05. I’m going to use the term “bad return” as it is used in the memo.
With that said, on one occasion I had an individual at the other end of an IRS call tell me that I wasn’t allowed to view the bad return after I commented that “I’ve seen the original return and it’s obviously fraudulent”. I believe that individual was wrong, though I didn’t remember the number of PMTA 2012-05 to confront her with so I just ignored the comment.
The main thing that can be gathered from the bad return is an address. It’s probably usually an abandoned address or the address of another victim whose mailbox the perpetrator has access to. And the information usually gets sold and re-sold so that even just the city/state is not useful for determining who initially obtained the information. But undoubtedly some perpetrators are especially stupid, and might leave a clue using the address. Whether or not it is a good idea for the victim to have this address is questionable, but my reading of PMTA 2012-05 and its references (which you should do yourself as I am not a lawyer) suggests that it is the victim’s right to do so if s/he chooses. (With an obvious exception being if the victim indicates an intent to use the information for vigilante justice or some other illegal purpose.)
Another option, in states where the pilot is being conducted (and if you can get the local police to cooperate), is to fill out a form 8821-A to disclose the bad return directly to the police.
That’s very interesting information. I found PMTA 2012-05 and have downloaded it to review further. Thanks very much for the comment.
[…] Dinesen, Taxpayer Identity Theft — Part 12 . More Kafkaesque obstacles to resolving an identity theft for his […]
When my business partner’s stepfather passed away, we filed his tax return. He was an identity theft victim–but the IRS caught it (the taxpayer made estimated payments that weren’t noted on the return). With the Power of Attorney we had, we had requested the “record of account” (we didn’t know whether the return had been filed), and we did see the return.
Like you, I was curious whether we should have been able to see the return. I was told by several individuals at the IRS that we should *not* have been. Two tax attorneys also told us that we should not have been able to see it.
That’s always been my gut feeling too. I still need to look at PMTA 2012-05 that Anthony referenced earlier. I’ve downloaded it but need to make time to review it.