Tax-related Identity Theft Scam Targets Physicians
By Ike Devji, JD
I recently received a warning on a tax-related identity theft scam targeting doctors from the Arizona Medical Association and the Maricopa County Medical Association. The threat is national in scope and all doctors need to be aware of this information and take basic, preventative, and defensive measures. I provide the content of the warning I received below, edited and with commentary, as has been echoed by many medical associations nationally.
“This week, staff of the Arizona Medical Association (ArMA) met with Arizona FBI and IRS agents about an IRS tax scam directed at physicians and other healthcare providers. The breech has also triggered engagement of the United States Secret Service. According to reports, fraudulent federal income tax returns using physician names, addresses, and Social Security numbers are being filed electronically. IRS officials believe this scam is an attempt to fraudulently collect tax refunds through electronic redirection of refunds to fraudulent bank accounts that can be accessed by the perpetrators. Victims are unaware of the identity theft until they attempt to file their taxes electronically, at which time they discover that a return has already been filed under their Social Security number. The IRS is sending 5071C letters to suspected fraud victims with instructions to contact the IRS identity theft website or call the IRS at (800) 830-5084.
“The Secret Service is encouraging physicians to go to www.experian.com/fraud and place themselves on a 90-day credit fraud alert to help slow or halt further attempted identity theft activities. We understand that Experian will feed this information and fraud alerts to the other two major credit-reporting agencies. It is suggested that you go back onto www.experian.com/fraud after 89 days to initiate subsequent 90-day credit fraud alerts. If you are NOT affected, our IRS agent contact does not recommend filing paper returns. In fact, it is considered best to file electronically as early as possible so as to prevent the bad guys from getting there first.” Additionally, the following is recommended:
- IRS. If you are a victim of this scam, you’ll note the IRS 5071C letter provides instructions about contacting the IRS through its identity theft website guide or by phone at (800) 830-5084 to let officials know you did not file the return referenced in their letter. If you are a victim, you will not be able to electronically file your return this year since a return with your Social Security number has already been filed. You’ll need to file a paper return and attach an IRS 14039 Identity Theft Affidavit to describe what happened. Attach copies of any notices you received from the IRS, like the 5071C letter. Be sure to let your tax preparer know if this happens to you. Verify with the IRS and your tax preparer where to mail your paper tax return, based on the type of return you are filing and your geographic area. Work with your tax preparer to file paper returns with Form 14039 (identity theft affidavit) and Form 8948 (e-file opt-out). You will also need an affidavit and a government issued ID (driver’s license or passport). The process of an individual filing the paper return with the Form 14039 notifies IRS that the paper return is the correct filing. IRS then removes the fraudulent filing from the taxpayers account, posts the correct tax return and if due a refund, issues the refund. The major way it impacts someone due a refund is that the process takes longer.
- Federal Trade Commission (FTC). File a complaint with the FTC here. This not only helps the FTC identify patterns of abuse, but the printed version becomes your identity theft affidavit. Along with a police report, that affidavit becomes your identity theft report, which you will need. The FTC recommends other immediate steps and provides helpful information here. 3. Police report. Consider filing a report with the local police where you reside. Bring all documentation available, including any state and federal complaints you filed. 4. Social Security. Call the Social Security Administration’s fraud hotline at (800) 269-0271 to report fraudulent use of your Social Security number. In case your number is being used for fraudulent employment, you can also request your Personal Earnings and Benefit Estimates Statement at www.ssa.gov/ or call (800) 772-1213. Check it for accuracy. 5. Contact a fraud unit at one of three credit bureaus. • Equifax • Transunion • Experian If you have not received a notification from the IRS but are concerned about whether you may have been victimized, call the IRS Identity Protection Specialized Unit at (800) 908-4490. Find more information from the IRS, including forms, at the IRS website.
ASSET PROTECTION LAWYER IKE DEVJI
- 11th year of Asset Protection only legal practice, helps protect a national client base of over 3,500 clients and over $5 billion in protected assets;
- Clients include literally thousands of physicians, various business owners, real estate professionals, builders & developers, C-level executives and professional athletes and entertainers;
- Regular contributor of legal articles to organizations including Physicians Practice, ADVISOR TODAY, Acrimoney.com, CFO-dailyreport.com, Producersweb.com;
- Contributing author to the book, “Optimal Financial Health: The Doctor’s Essential Wealth Management and Preservation Handbook”.
- Published as a WORTH magazine “Leading Wealth & Legal Advisor”;
- Works with a national network of financial, legal and tax advisors to provide education, business development events and client content on wealth preservation for advisor communications;
- Former Managing Attorney of the law firm of Lodmell & Lodmell, one of the nation’s leading Asset Protection only law firms. Currently of-counsel with the firm and selectively consults and provides Asset Protection services to high-net worth, high liability clients;
- Of-counsel with Davis, Miles McGuire Gardner, PLLC where he has helped found the Asset Protection and Wealth Preservation practice groups;
- Speaker on Asset Protection to literally thousands of physicians and other high-net worth individuals across the country;
- Co-counsels on Asset Protection planning with attorneys nationwide;
- Teaches continuing legal education on this subject to other attorneys and regularly lectures at the request of leading medical practice management and investment management groups including most recently: NFP, MultiFinancial Securities, ING, ING TRUST, The American Education Institute, CFO Solutions, numerous banks, and both Lorman and the National Business Institute.