Taxpayer Identity Theft – Part 5

This is the story of Wendy Boka’s saga with identity theft and the IRS. Her husband Brian died in January 2010 and someone stole his identity and filed a fraudulent tax return in his name. We’re still trying to get the IRS to sort this mess out — all these months later.

The names are real and are used with Wendy’s permission.

You can find out more about Wendy at her blog, http://www.wendyrebuilding.blogspot.com/.

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Read the other installments in this series: Parts 1, 2, 3 and 4.

During my call with the IRS in mid-May I learned some interesting information about the person who stole Brian’s identity.

The person filed a tax return showing $0 of income, $2,300 of tax withholding, and a $1,000 refundable education credit. This return was filed about one week before we tried e-filing the legitimate return.

To the IRS’s credit, they flagged the return as possibly fraudulent and sent out a notice to whatever address was shown on the return.

To the IRS’s discredit, they still haven’t resolved the situation.

So how did Brian’s identity get stolen? My guess is that someone looked on the “Death Master File.”

This is a file published by the government that gives all the information an identity thief could want. Basically, whenever someone dies, their name goes in this file, along with their date of birth, date of death and Social Security Number.

Accountants might be familiar with the Master Death File, but many average taxpayers are probably unfamiliar with it.

The IRS Taxpayer Advocate Service is aware of the problem and testified before Congress in late June to encourage lawmakers to limit access to the file.

Somehow I doubt lawmakers will do anything.

A common question that people have when they hear about this is: what can I do to protect myself? I honestly don’t know, other than to complain to your elected officials and get them to change the way the “death file” is handled.

Coming up in Part 6 on Monday — the saga continues with another call to the IRS!

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”