Surprise small businesses are also at risk for identity theft. Businesses and their employees can and have had their identities stolen and their personal information used to open credit card accounts or file fraudulent tax returns to obtain false refunds.
In the past two years, the IRS noticed a significant increase in the number of fraudulent filings of Forms 1120, U.S. Corporation Income Tax Return, Forms 1120S, U.S. Income Tax Return for an S Corporation, and Forms 1041,U.S. Income Tax Return for Estates and Trusts, as well as Schedules K-1.
Identity thieves use stolen employer identification numbers (EINs) to create fake Forms W-2, Wage and Tax Statement, that they file with fraudulent individual income tax returns. Fraudsters also use EINs to open new lines of credit or obtain credit cards. Thieves have begun to use company names and EINs to file fraudulent returns.
Businesses, partnerships, and estates and trust filers should be alert to potential identity theft and contact the IRS if they experience any of the following issues.
- Extension to file requests are rejected because a return with the EIN or SSN is already on file.
- An e-filed return is rejected because a duplicate EIN or SSN is already on file with the IRS.
- A 5263C or 6042C Letter to verify identity is received.
- The taxpayer receives an unexpected receipt of a tax transcript or IRS notice that does not correspond to anything submitted by the filer.
- The taxpayer fails to receive expected and routine correspondence from the IRS because the thief has changed the address.
If you suspect identity fraud contact the IRS ASAP at 800-908-4490. Then file the required forms.