Identity theft is something we have all heard of. We have been warned to be careful of how to purchase items online, or even to be cautious when purchasing items at the gas pump. How many of you have considered the possibility of your identity being stolen for tax purposes? It is happening and the IRS is concerned enough to make it top their 2012 Dirty Dozen tax scams list.

There is a new unit formed by the IRS called the Identity Protection Specialized Unit. At the IRS website you will also find suggestions on how to protect yourself from identity theft.

The IRS has begun issuing notices for your 2011 individual tax return in regards to identity theft. You can recognize this notice if next to the date of the letter is “LTR 4883C.” Upon receipt of the letter you need to do one of the following.

1. Call, or request the IRS call you, within 30 days of receipt of the letter.
2. Contact your tax preparer and sign a Form 2848 Power of Attorney, giving them permission to discuss the notice with the IRS.

Under either circumstance, the IRS will be requesting information to help determine your identity with the tax return that has been filed. The IRS will not be able to process your tax return until they have confirmed the identity associated with the return.

While there are several ways to protect your identity, the IRS has listed the e-mail phishing schemes that have been used recently as one of the primary ways of stealing your identity. Our November 30, 2011 release discussed the EFTPS phishing scam. Regardless do NOT respond to any e-mail that claims to be from the IRS, EFTPS, or Social Security Administration.