Guide to IRS Letter 5071C
How to Verify Your Identity
How to Verify Your Identity If You Receive IRS Letter 5071C
Getting IRS Letter 5071C in the mail means the IRS suspects you’re the victim of identity theft. Because of this, it represents one of those good news, bad news situations.
The bad news is that you could be the victim of identity theft. The good news is that the IRS may be able to stop the identity thief from using your identity to file a fraudulent return and steal your tax refund.
If you receive this letter, you might be confused as to what you need to do. A tax lawyer from the W Tax Group can help explain your options and guide you through the process of verifying your identity and ensuring your tax return is properly processed by the IRS.
What Is IRS Letter 5071C?
Letter 5071C from the IRS informs you that the IRS has received a Form 1040-series tax return with your tax ID information but believes it could represent someone’s attempt to steal your identity for tax purposes. This letter gives you the opportunity to prove your identity and confirm whether the return the IRS received came from you.
The IRS knows that tax returns are a prime target for scammers and fraudsters. It’s a relatively easy way to earn a quick and dishonest buck by putting in false financial information on a tax return and then filing it to get a large tax refund check. The truth will eventually come out, but it’ll be you who has to clear your name and clean up the mess.
Because of this, the IRS has the Taxpayer Protection Program. This program uses computers to help identify millions of potentially fraudulent tax returns. The IRS then pauses the processing of these suspicious returns until the taxpayer can verify if the flagged return is legitimate.
Reasons for Receiving Letter 5071C from the IRS
Finding a 5071C letter in your mailbox likely signals one of two things. First, you filed a tax return, but the IRS also received another tax return from someone else claiming to be you. The identity thief probably used your Social Security number, date of birth, and other personal information to file the tax return. The IRS is now trying to figure out which one of the returns is yours.
Second, you didn’t file a tax return, but someone else did, and that return included information that seemed suspicious to the IRS. These red flags caused the IRS to generate and send you a 5071C letter.
In either situation, the IRS will pause any processing of the returns until they can confirm the authenticity of the tax return(s) they have to process.
What You Should Do If You Received Letter 5071C
No matter what’s going on with the IRS and potential ID theft, you’ll need to respond to Letter 5071C to verify your identity. The quickest and easiest way is to go online and use the IRS Identity and Tax Return Verification Service. To do this, you’ll need an online account with the IRS (ID.me account). If you have one, go ahead and sign in. If you don’t, you’ll have to create an ID.me online account to access IRS’ online services.
You can create an ID.me account in one of two ways. The self-service option requires you to provide a photo of a government-issued ID and a selfie. The live-call option allows you to complete a video chat with an ID.me chat agent without requiring that you provide any biometric data.
After signing in, you’ll need to answer some questions about the tax return in question. If you filed a tax return, you’ll need information from your 5071C notice and the tax return you filed. If you didn’t file a tax return, you’ll just indicate that you didn’t file the return the IRS has flagged.
If you can’t create an ID.me account or don’t have access to the tools needed to verify your identity online, then you can use the telephone option. To do this, call the IRS Taxpayer Protection Program number provided on Letter 5071C. If you filed a return, you’ll want all of the following documents and information available before calling:
- The tax return in question.
- A tax return from a prior year than the tax return that’s been flagged by the IRS.
- The 5071C notice.
- All supporting documents for the tax return in question and the tax return from the prior year. This includes things like a W-2, 1099, Schedule C, etc.
If you didn’t file a return, then you’ll explain that to the person you speak with when you call. One thing to keep in mind is that whether you verify your identity online or by phone, you won’t need to complete or file IRS Form 14039, Identity Theft Affidavit.
What Happens After Verifying Your Identity
What happens next depends on your specific tax situation. If you did file the flagged tax return, then the IRS will remove the hold on it and continue to process it. If you didn’t file the suspicious return, then the IRS will remove it from their records. If you still plan on filing a tax return, e-filing may not be an option, so expect to file your tax return by mail.
Assuming you were the victim of identity theft, the IRS will place you in the Identity Protection PIN Program. This means the IRS will give you an IP PIN (Identity Protection PIN), which is a six-digit number the IRS gives you each year by sending you a CPA01A Notice. Only you and the IRS know this number and you’ll need to provide it when you file your tax return for the year. The IRS will know that anyone trying to submit a tax return using your Social Security number or ITIN without also providing your IP PIN is probably an identity thief.
Preventing ID Theft in the Future
In addition to using an IP PIN (which you can request from the IRS even if you haven’t been a victim of identity theft), there are other strategies you can use to prevent someone else from pretending to be you while filing taxes:
- Set up an online IRS account (using ID.me). Having an online account lets you review your tax records, obtain copies of your tax transcript, and view any tax balances you might have.
- Carefully read any correspondence from the IRS. These could indicate that there are irregularities or warn you about a problem that you can look into sooner rather than later.
- Protect your personal information. Don’t give your Social Security number, date of birth, mailing address, and other information to just anyone, especially online.
- Avoid responding to scammer and phishing emails.
- Use strong passwords for your online accounts.
- Use multi-factor authentication, especially if you prepare and file your taxes using an online service.
Other Ways You May Find Out About Tax Identity Theft
Sometimes, you may not discover tax identity theft by receiving this letter. Instead, you may discover that someone has stolen your identity when the IRS rejects your e-file due to a duplicate Social Security Number. That means that someone has already filed a return with your number, and you should contact the IRS to let them know it wasn’t you.
The W Tax Group Can Help
Depending on your situation, you can respond to a 5071C letter from the IRS by yourself. However, there are advantages that come with obtaining the help of a tax professional, like one from the W Tax Group. One of the biggest benefits is having a tax professional communicate with the IRS on your behalf. You may be unsure about saying the right thing or providing the correct information to the IRS, but having the W Tax Group can provide valuable peace of mind.
This assistance becomes even more valuable if the tax identity theft causes significant tax issues for you. Maybe someone stealing your identity has resulted in you not getting the tax refund check you expected or a tax bill that you shouldn’t have to pay (or both). Either way, the W Tax Group can help you clear things up and set things right with the IRS. To learn more about what the W Tax Group can do for you when you receive IRS Letter 5071C, contact us to schedule a free consultation.
