Idenity Theft

[Donanita]

Client had idenity theft bills that total $18000, I call and ask her why she paid this. Said she thought she had to( not a really bright client) Question is can this be taken as a causality and theft. Never had anyone pay back so not sure how to treat this or is this just her loss,

[JG EA]

What about having the client see an attorney to see if she can get some of that money back? Even if she only got some back it would probably be better than some tax break.

Another thought is maybe if she really didn't have to pay it back then it wouldn't qualify as a theft loss.

Another thought. Maybe the money isn't so clearly Identity theft. To whom did she pay the money back?

[Jiggers]

Need more information about this

Why would anyone pay $18,000 to anyone if there was something wrong?

I think you need more information regarding this.

[Mo Sheets]

Another Avenue....

Some homeowner policies now have an "identity theft" provision and will pay the cost of getting things straightened out. I have no experience with this but it might be worth having your client look into this. If she did actually pay a company this might be covered under the homeowner's policy.

Good luck!

Mo

[thomtax]

Why would anyone pay $18,000 to anyone if there was something wrong?

Easy explanation. I have known some very smart people that actually paid charges that were not theirs on credit cards because they were embarrassed that they had allowed it to happen and thought others would look down upon them. In effect, they were taking the guilt instead of putting it where it belonged, sort of a "head in the sand" attitude.

LT

[Donanita]

[QUOTE=thomtax;79230]Easy explanation. I have known some very smart people that actually paid charges that were not theirs on credit cards because they were embarrassed that they had allowed it to happen and thought others would look down upon them. In effect, they were taking the guilt instead of putting it where it belonged, sort of a "head in the sand" attitude.

Did you prepare the tax return for these people and if so did your take the theft on Form 4684. Client had credit card theft and even with the 10% and $100 floor she could recoup some of the cost in her refund. Just don't know if idenity theft would qualify.

[tilt53]

Has the client also reported this information to the IRS ID Theft Hotline - 800-908-4490

[thomtax]

[QUOTE=Donanita;79532]

Did you prepare the tax return for these people and if so did your take the theft on Form 4684. Client had credit card theft and even with the 10% and $100 floor she could recoup some of the cost in her refund. Just don't know if idenity theft would qualify.

No I didn't - many of these were back before I got into the business. But it was never a problem for a preparer because with the attitude they had, that would require admitting to a stranger what had happened. And that would be too embarassing. "I'd rather pay the money than admit that I was taken."

LT