Identity theft? What to do: IRS Letter 5071C

What to Do If You Receive an IRS Letter 5071C

Have you received a letter from the IRS asking you to verify your identity? If so, you might be wondering what it means and what you need to do. Don’t panic, this is not a scam. The IRS sends out Letter 5071C to taxpayers who have filed a tax return that the IRS suspects might be fraudulent. The purpose of the letter is to confirm that you are the legitimate owner of the Social Security number (SSN) and the tax return that you submitted.

In this article, we will explain what Letter 5071C is, why you received it, how to respond to it, and what to do if you can’t verify your identity or if you didn’t file the tax return in question. We will also provide some tips on how to avoid identity theft and protect your personal information.

Here is a table of contents with links to help you navigate this article:

What is Letter 5071C?

Letter 5071C is a notice from the IRS that informs you that they have received a tax return with your name and SSN, but they need more information from you to process it. The letter is part of the IRS’s Identity Verification Service, which is designed to prevent identity thieves from using stolen SSNs to file fraudulent tax returns and claim refunds.

The letter will include a reference number, a toll-free phone number, and a website address where you can verify your identity online. The letter will also ask you to have your prior year and current year tax returns handy, as well as any supporting documents, such as Forms W-2 or 1099.

Why did I receive Letter 5071C?

You received Letter 5071C because the IRS detected some unusual activity on your tax account. For example, the IRS might have noticed that:

• The address on your tax return is different from the address on file with the IRS or the U.S. Postal Service.
• The bank account number or routing number on your tax return is different from the one you used in previous years.
• The income or deductions on your tax return are significantly different from what you reported in previous years.
• The tax return was filed electronically using a software provider or a preparer that the IRS has flagged as suspicious.

These are just some of the possible reasons why the IRS might send you Letter 5071C. The IRS does not disclose the exact criteria they use to identify potentially fraudulent tax returns, as that would help identity thieves evade detection. However, the IRS assures taxpayers that receiving Letter 5071C does not mean that they are being audited or that they have done anything wrong. It simply means that the IRS needs more information from them to verify their identity and process their tax return.

How do I respond to Letter 5071C?

If you receive Letter 5071C, you should respond as soon as possible, preferably within 30 days of the date on the letter. The sooner you respond, the sooner the IRS can process your tax return and issue your refund if you are entitled to one. If you don’t respond within 30 days, the IRS will assume that the tax return was filed by an identity thief and will reject it.

You have two options to respond to Letter 5071C: online or by phone. The online option is faster and more convenient, but you need to have access to a computer or a smartphone with an internet connection. The phone option is available for those who don’t have internet access or who prefer to speak to a live representative.

Here are the steps to follow for each option:

Online option

1. Go to the IRS Identity Verification Service website at https://idverify.irs.gov.
2. Click on the “Continue” button to start the verification process.
3. Enter the reference number from your letter and your SSN.
4. Answer a series of questions to verify your identity. The questions will be based on your personal and financial information, such as your date of birth, your address, your income, your bank account, etc. You will need to have your prior year and current year tax returns and any supporting documents handy.
5. If you successfully verify your identity online, you will receive a confirmation code that you should keep for your records. The IRS will then resume processing your tax return and issue your refund if you are entitled to one.

Phone option

1. Call the toll-free number on your letter. The number is 800-830-5084.
2. Follow the prompts to reach a customer service representative. You may have to wait on hold for a while, especially during peak hours.
3. Provide the reference number from your letter and your SSN.
4. Answer a series of questions to verify your identity. The questions will be similar to those on the online option, so you will need to have your prior year and current year tax returns and any supporting documents handy.
5. If you successfully verify your identity by phone, you will receive a confirmation code that you should keep for your records. The IRS will then resume processing your tax return and issue your refund if you are entitled to one.

What if I can’t verify my identity or I didn’t file the tax return?

If you can’t verify your identity online or by phone, or if you didn’t file the tax return that the IRS received with your name and SSN, you should still call the toll-free number on your letter as soon as possible. The customer service representative will help you resolve the issue and advise you on what steps to take next.

For example, if you can’t verify your identity because you don’t have the required documents or information, the representative might ask you to mail or fax copies of certain documents, such as your driver’s license, passport, Social Security card, etc. If you didn’t file the tax return because someone else used your SSN to file a fraudulent return, the representative might ask you to complete an Identity Theft Affidavit (Form 14039) and submit it along with a copy of your valid government-issued identification.

In either case, the IRS will work with you to protect your account and prevent further misuse of your SSN. However, this process might take longer than usual, so you should be prepared to wait several weeks or months before the IRS can process your tax return and issue your refund if you are entitled to one.

Tips on how to avoid identity theft and protect your personal information

Identity theft is a serious crime that can have devastating consequences for your finances, credit, and reputation. The IRS estimates that in 2023 alone, identity thieves attempted to file about 2 million fraudulent tax returns using stolen SSNs, claiming about $15 billion in refunds. Fortunately, the IRS was able to stop about 90% of these attempts before issuing any refunds. However, that still means that about 200,000 taxpayers were affected by identity theft and had to deal with the hassle and stress of proving their identity and reclaiming their refunds.

To avoid becoming a victim of identity theft, here are some tips on how to protect your personal information:

• File your tax return as early as possible. This way, you can beat the identity thieves who might try to file a fake return using your SSN before you do.
• Use a secure method to file your tax return. If you file electronically, use a reputable software provider or a preparer that has a valid Preparer Tax Identification Number (PTIN). If you file by mail, use certified mail with return receipt requested.
• Protect your SSN and other sensitive information. Don’t carry your Social Security card in your wallet or purse. Don’t share your SSN with anyone who doesn’t need it for a legitimate purpose. Don’t respond to unsolicited phone calls, emails, or texts that ask for your personal or financial information. The IRS will never contact you by these methods to request such information.
• Monitor your credit reports and bank statements regularly.
• Shred any documents that contain your personal or financial information before throwing them away. Identity thieves can rummage through your trash and use these documents to steal your identity or open accounts in your name.
• Use strong passwords and change them regularly. Don’t use the same password for multiple accounts or websites. Don’t use easy-to-guess passwords like your name, birthday, or SSN. Use a combination of letters, numbers, and symbols. Use a password manager or a secure app to store your passwords.
• Review your tax account and transcripts online. You can access your tax account and transcripts on the IRS website using your SSN, date of birth, and other verification information. You can check if there are any suspicious activities or changes on your account, such as a refund issued to a different bank account or address.
• Report any signs of identity theft to the IRS and other authorities. If you receive a notice from the IRS that indicates a potential identity theft issue, such as a letter stating that more than one tax return was filed using your SSN, respond immediately and follow the instructions. You can also call the IRS Identity Protection Specialized Unit at 1-800-908-4490. You should also file a complaint with the Federal Trade Commission (FTC) at identitytheft.gov and contact the three major credit bureaus (Equifax, Experian, and TransUnion) to place a fraud alert on your credit reports.