Rejected returns due to SS number previously used

[mrtax]

Just curious if any practitioners have experienced an increase in possible identity theft on returns e filed. I have had over a dozen clients whose returns were rejected this year due to the "TIN used on a previously accepted return". I usually see one or two per year in my practice.

[MBTS]

I have seen an increase. Sad for the taxpayers because they are now frantic as to how are they going to fix. I have a book that I ordered from the Federal Trade Commission called "Taking Charge: What to do if your Identity is Stolen". I give to the Taxpayer. It is really good by explaining exactly what to do.

FTC.gov/IDtheft

[Burke]

I have had two cases. One was the primary, one was a dependent. And another who has not yet filed, but got a letter from the IRS which said they had received his 2014 return and were questioning it. It's an increase for me, because I have never had ANY.

I checked out the FTC website and the minimum order for one of the booklets was 80, and the other was 100. Even though they are free, I surely hope I won't need THAT many! There was no way to order less.

[Y2KEA]

I had a 1% rejection rate for 2013. This year I had 0%. Not to say IRS is doing anything worth squat to prevent ID theft. mrtax might want to question his software provider. Tell us mrtax who the provider is & what percentage the "over a dozen" represents.

[David1980]

I think it also varies by region. And the type of tax returns. Lower income EIC returns seem to have a higher rate.

[mrtax]

I have been using Pro-Series for many years with very few issues. Every year we get the typical scenario where parent claims the kid but the kid claimed himself or custody battles as to whose year it is etc, but I am referring to the primary taxpayer (long term clients) no EIC issues. I always thought that the IRS matches birth year, last name & SS and yet I'm seeing it more & more. Not easy to explain to the client. A dozen is a low percentage of my client base but I'm just wondering if others are seeing this uptick.

[Burke]

It's not the software. I know the IRS matches SSN/Name but not sure about birth year. Can anyone confirm? We had a big breach with Anthem policyholders here in Oct. All 3 of mine had Anthem health insurance. None are EIC clients. We got a transcript on the first one, and it was not EIC. Just large wage income reported and tax withholding to generate refund. Standard deduction, no dependents. Nothing else on the return.

[TAXNJ]

Question about provider

I had a 1% rejection rate for 2013. This year I had 0%. Not to say IRS is doing anything worth squat to prevent ID theft. mrtax might want to question his software provider. Tell us mrtax who the provider is & what percentage the "over a dozen" represents.

Why & What would you ask ask the software provider?

Doesn't the provider receive the reject code from the IRS?

Is so, should you want to find out from the IRS for an answer of the reject?

[David1980]

It's not the software. I know the IRS matches SSN/Name but not sure about birth year. Can anyone confirm? We had a big breach with Anthem policyholders here in Oct. All 3 of mine had Anthem health insurance. None are EIC clients. We got a transcript on the first one, and it was not EIC.

The IRS matches birth year for a dependent if that dependent is listed on Sch EIC. Otherwise they don't match it for dependent. You could see other weird rejects if the wrong DOB was entered for a dependent - like if the child is 17 years old in the IRS systems but you entered a DOB making the child 16 years old and thus claimed CTC.

The IRS also verifies the taxpayer/spouse birth dates when the PIN type is Self-Select On-Line. That's basically DIY returns - TurboTax and the like. (Rejects F1040-524-01, F1040-525-02, F1040-525-03.) The IRS doesn't have a rejects for the birth date when using practitioner PIN method.

So if someone is using an EFIN (probably stolen) and can thus use the practitioner PIN method of signing a return they don't need to match the birth dates to commit identity theft.

Just large wage income reported and tax withholding to generate refund. Standard deduction, no dependents. Nothing else on the return.

Which isn't surprising. When you start adding dependents and EIC to a return you have that many more potential rejects. With just adding a fake W-2 and claiming a refund of the tax withheld there's not a lot of things it can reject for. And you could file a return that way for every single SSN. Instead of a return with 3 dependents you've got 4 returns all with W-2s and refunds of tax withheld.

What I was saying about lower income EIC clients having a higher incidence of identity theft is more about the type of people that become victims rather than the type of fraud that is done on the identity theft returns. And shopping preparers to find the one who will get you the biggest refund is perhaps one of the worst things you can do if you don't want your identity stolen. The sort of person who will create a return with a very high refund is often the same kind of person who will participate in identity theft.

Of course bad preparers are only one cause of identity theft. How does one protect themselves against something like the Anthem data breach? And that would affect all sorts of people.

[Lion]

So, I just ordered 80. Thank you for the recommendation. None yet, but lots of Anthem customers here in CT, including all my teacher clients. I'll keep a dozen and take the rest to my next meeting of NY/CT-ATP in May.

[Burke]

Yeah, I thought about contacting a few colleagues to see if we could share.

[Burke]

The IRS matches birth year for a dependent if that dependent is listed on Sch EIC. Otherwise they don't match it for dependent. You could see other weird rejects if the wrong DOB was entered for a dependent - like if the child is 17 years old in the IRS systems but you entered a DOB making the child 16 years old and thus claimed CTC.

You're right. I forgot I had one reject for the CTC one year. Correct DOB was input on tax return which we had always used. That year he was 16. Turns out SSA had the wrong DOB in their records! It was an early January birthday and we think the submitting personnel at the hospital put down the previous year by mistake. Had to send SSA a copy of the birth certificate to get it straightened out, then amend the return.

[Y2KEA]

Why & What would you ask ask the software provider?

Doesn't the provider receive the reject code from the IRS?

Is so, should you want to find out from the IRS for an answer of the reject?

There was a discussion here last year about a high amount of ID theft which as it turns out occurred through a certain software provider. It appeared to be an inside job. I posited the question looking for a pattern.

[TAXNJ]

Thanks

There was a discussion here last year about a high amount of ID theft which as it turns out occurred through a certain software provider. It appeared to be an inside job. I posited the question looking for a pattern.

Just heard on the news about former employees of a Insurance Company, did not hear yet about the tax software provider yet! Thanks

[AZ-Tax]

Former Tax Preparer filed Ext w/o consent of TP

I e-filed the ext for my new client and it gets rejected due to "SS# was previously filed". Called tech support and come to find out it was e-filed in another state. Contacted TP and TP replied I didn't authorize that ext to be filed other then with you (me). That is a first for me.