PALM BEACH GARDENS, Fla. —
My tax nightmare began when someone stole my identity in 2011 and filed a fake tax return in 2012.
According to the Internal Revenue Service, someone using my name, birthdate and social security number filed a fake tax return with an address in Orlando.
So when I filed my return, the IRS merged the two reports together and assumed I had under-reported my income. They slapped me with a bill for unreported taxes, fines and interest.
The amount due? Over $31,000. And I thought I was due a refund!
I called the IRS and learned my case was under investigation by the fraud department. They told me to file a fraud affidavit, sit tight and they would let me know the outcome.
So I waited to hear what would happen.
In 2013 I filed taxes and they sent a refund.
But in 2014, they seized my refund and applied it to that $31,000 bill they originally said I owed.
I went to the local IRS office, but it had a four hour wait. So I called again and tried to make an appointment.
The person who answered said it wasn’t necessary to go to the local office – they would just go on the same computer file she had in front of her.
She said the fraud department was making progress on my case and to just keep waiting for an update.
But I was afraid to file my 2015 return for fear they would seize that refund, too. So I filed an extension.
Then in 2015, I got another letter from the IRS. I didn’t owe $31,000 anymore. Now I owed $9,000 and if I didn’t pay it within six weeks, they could start seizing my bank accounts.
So I’m an investigative reporter and I couldn’t get this cleared up?
I’m not the only one.
Greg Morse is a lawyer whose specialties include tax cases. He actually goes to court to argue tax disputes on behalf of clients. But his six-year IRS identity fraud battle is as frustrating and complicated as mine.
“My wife is my law partner, we’re lawyers; how is this going so wrong? We don’t understand,” said Morse.
Just as in my case, someone used Morse’ name and social security number to file a fake tax return in 2011, so he called the IRS.
“The initial person I spoke with there was not very helpful, they told me the identity theft didn’t happen – I owe this money.” said Morse.
Morse said the fight to get his fraud cleared up took years and was a battle.
“What it ultimately makes you feel like is I didn’t pay my taxes or do something wrong, and you do, you become a victim of the IRS,” said Morse.
Morse wrote letters and sent in copies of his tax returns each time the IRS notified him he hadn’t filed his returns. But he says one IRS representative even warned him to stop sending so many returns – that it could be considered harassment.
“I was just trying to answer their letters that kept saying I hadn’t filed my returns,” said Morse.
Morse said it got really scary when in 2014, the IRS told the state of Maryland – a place he’s never lived – that he owed income tax there. He surmises it was because the person who filed his fake tax return listed a Maryland address. Maryland then seized a payment Morse was due from a federal court case he’d just tried.
“Because the IRS has full power to seize, they don’t need a court hearing. I wasn’t noticed by the IRS they were going to seize money in Maryland, I just got a letter saying we seized your money and then after that, with the IRS, it’s very hard to get your money back,” said Morse.
Morse got aggressive, even going to court, and said just this year, six years later, he is finally “somewhat” confident his tax fraud nightmare is over.
How did he do it? Morse advises to use each state’s government tax advocacy program to help if you have your tax identity stolen. It’s there to help the hundreds of thousands, if not millions of people who are victims of identity fraud tax theft.
The free government program will help coordinate your case, which is key when trying to deal with the vast IRS.
Morse said the agency’s left hand doesn’t know what the right hand is doing.
“The piecemeal way the IRS deals with this is, one agency gets my identity theft affidavit and information and another agency gets the information that I didn’t pay my taxes and that agency will start the process of trying to collect on taxes that are not even owed,” said Morse.
The tax advocate I spoke to said I had to get that latest $9,000 payment cleared up first, and connected me to collections – not a good experience.
The person there told me my identity theft was cleared up – what? And insisted I owed $9,000 and needed to pay it pronto. After I refused to admit I owed that amount and asked for tax transcripts, she put me on hold and then came back to say she would send the transcripts and I now owed $6,000, and could I agree to pay it within 10 days?
I told her no, I was going to wait for my transcripts and review them with my tax accountant.
Morse told me my experience was typical.
“That’s what’s scary, when they believe you owe money, they don’t listen, they don’t believe you don’t owe money, they just think you’re a liar or are trying to get out of paying money,” said Morse.
Morse said the IRs wields all the power, and if they disagree with you, in the end you’re out of luck. He said even though his case is over, he still is out about $1,000 in penalties and interest that he hasn’t been able to resolve.
Morse said, as a tax attorney, he doesn’t think you necessarily need an attorney if this happens to you.
He advises that you:
*Read every notice the IRS sends and send an answer by the date stated.
*Send all correspondence by certified mail, or pay by check, to keep a record.
*Read the rights that are listed – if they offer you a hearing, write back that you want one, even if you don’t. That way, you preserve your right to have one in the future.
*Ask to speak to a supervisor, especially if you are dealing with collections. They have much more power and leeway to deal with your problems.
*You have the right to stop temporarily collections and levies if you notify the IRS you are seeking representation
*Contact the tax advocacy program to help you resolve your theft issue
And file your taxes as soon as you can – when it comes to stolen identity, the first one to file a return often wins – even if they are the scammer.
Stay informed on how your identity can be stolen.
The IRS offers these tips.