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When it comes to taxes, there’s nothing more disappointing than tearing open your IRS refund letter and instead of finding a check, you are presented with a bill for several thousand dollars.  Surprise – you forgot to claim income, which the IRS picked up when the company or person who paid you sent in a Form 1099 listing your additional income.

To be truthful, there is something more disappointing.  When the tax bill comes, it turns out you are being charged with someone else’s income.  The IRS seizes your refund and demands more taxes from you by adding another person’s income to your tax return.  As an example, you may have really earned $50,000, but once the IRS gets done adjusting your return, your income rises to $80,000 and you owe another $8,000 in tax after penalties and interest are added.

In our digital age, identity thieves ply their trade by selling names and social security numbers to illegal immigrants anxious to find work.  With forged documents, illegal immigrants impersonate American citizens working at menial jobs across the country.  Employers, who are unaware or choose to be unaware, pay wages and report earnings to the IRS for impostors using stolen identities, unwittingly adding income to unsuspecting taxpayer victims.

There are no easy fixes to this type of tax problem.  Recently, our STS Tax Law attorneys resolved an identity theft case using old-fashioned evidence.  Our client filed the proper form, the Form 14039, Identity Theft Affidavit, with the IRS, where it languished for six months.  In the interim, our client’s 2009 refund was seized to pay the bogus “additional” taxes she owed for tax years 2006 through 2008.

Once we got involved, we filed a Form 911, Request for Taxpayer Advocate Assistance, documenting at length why our client could not have been the person who earned the wages listed on the employer’s Form W2.  When the Taxpayer Advocate representative insisted our client must have performed the work and “forgotten” about it, we had to prove her wrong. 

By aggressively pursuing the employer’s human resources department, we discovered the imposter’s manager at a Washington, D.C. hotel.  We arranged a meeting between the manager and our client.  The manager, who oversaw the imposter for three years, attested he had never seen our client before.  This affidavit convinced the Taxpayer Advocate and achieved success, ensuring the abatement of the additional taxes and the return of our client’s refund.

When it comes to identity theft, beware.  The IRS is a lackluster shepherd at best, unable to tell a wolf in sheep’s clothing from the rest of the flock.
Murray Singerman, JD, LLM


Self-dubbed "Tax Knight," Murray Singerman writes in defense of the "humble citizen," often beaten down by the IRS and state taxing authorities.  Enjoy his short ruminations about the ever-changing area of tax controversy law.  Written with accountants in mind, Murray offers useful info and a chuckle to make your day a bit more enjoyable.


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