Tax time can be tricky, and the IRS faces a big challenge—stopping fake refunds. With credits like EITC, ACTC, and RRC on the rise, so are attempts at fraudulent refunds. The IRS uses a process to spot possible identity theft (IDT), temporarily stopping the review. This blog looks at when the IRS pauses tax return reviews, sends a letter to the filer, and asks for ID and tax return item verification before continuing.
For help with tax issues tied to identity theft, victims can visit the Taxpayer Advocate Service (TAS) Identity Theft Get Help page.
Decoding IRS Identity Check Letters
If your return is flagged for possible IDT, you might get one of these letters:
- Letter 5071C, Potential Identity Theft during Original Processing with Online Option – Sent the most, offering online and phone choices.
- Letter 4883C, Potential Identity Theft during Original Processing – Gives a phone option.
- Letter 5447C, Potential Identity Theft during Original Processing; Foreign Address – For global taxpayers, offering phone and mail choices.
- Letter 5747C, Potential Identity Theft during Original Processing – An in-person option only, used sparingly.
These letters help you verify your identity online, over the phone, or, in some cases, in person at a Taxpayer Assistance Center.
Challenges and Recap from 2022
In 2022, the IRS stopped processing 4.8 million returns, asking for identity checks before issuing refunds. About two million responded, 255,000 confirmed IDT cases, and 2.5 million are still waiting as of December 31, 2022.
If you’re waiting for your refund or filed in 2023 and it’s not processed, your return might be flagged. Check for the letters from 2021 or 2022. If not, check your IRS online account or call the Taxpayer Protection Program (TPP) at 800-830-5084 (or 267-941-1000 for international callers).
The Identity Check Process
If you get a letter, check your online account, and if you need to verify, the portal directs you to the Identity and Tax Return Verification Service website. If the IRS needs identity verification, an Accounts Management rep will resend the letter with instructions.
Why Some Don’t Verify
People might not respond because it’s IDT, they didn’t get the letter, moved, didn’t understand it, or had trouble reaching the IRS phone line due to low service levels.
To help, the IRS improved letter clarity, but there’s more to do, especially for non-native English speakers. Crystal Clear Tax knows the challenges taxpayers face during this process.
Crystal Clear Tax: Your Guide in Financial Complexity
At Crystal Clear Tax, we understand the twists of identity checks and delayed refunds. We cover individual and business tax services, bookkeeping, and financial advising. For single moms entrepreneurs and those needing efficient services, Crystal Clear Tax is here for you.
Book a chat with us today, and let Crystal Clear Tax help you make smart financial choices. Your peace of mind matters to us.
