IRS Form 14039 Tax Identity Theft Affidavit: A Guide to Understanding Identity Theft and Tax Fraud

Steven de la Fe, CPA

November 28, 2023

In this comprehensive guide, we delve into the intricate world of IRS Form 14039, a critical document for victims of identity theft, especially in relation to tax fraud. Understanding the nuances of this form and the associated processes is essential for safeguarding your financial wellbeing. This article offers valuable insights and practical advice, making it a must-read for anyone concerned about identity theft and tax fraud.

What is Tax-Related Identity Theft and Why Should You Be Concerned?

Tax-related identity theft occurs when someone fraudulently uses your SSN to file a tax return in your name and claim a refund. This criminal act can result in significant delays in receiving your legitimate refund and create complex issues with the IRS. As a victim, you may face a prolonged resolution process and the potential for additional financial losses. Understanding the gravity and implications of tax identity theft is essential for every taxpayer.

Recognizing the Signs of IRS Identity Theft: What to Look Out For

Knowing the signs of identity theft is crucial. Key indicators include receiving a notice from the IRS about a tax return you didn't file, more than one tax return filed using your SSN, or IRS records indicating you received wages from an unknown employer. Staying vigilant and promptly responding to any unusual IRS correspondence or activity on your tax account is vital for early detection and resolution.

The Role of IRS Form 14039 Tax Identity Theft Affidavit

Form 14039, the Identity Theft Affidavit, serves as a critical tool in notifying the IRS that your identity has been compromised. By submitting this form, you inform the IRS of the fraudulent activity, which is the first step in resolving the issues related to tax identity theft and preventing further misuse of your information in future tax filings.

How to Properly Complete and Submit Form 14039

Completing Form 14039 involves providing detailed personal information and a clear explanation of your identity theft situation. Key sections include personal identification details, a description of the theft incident, and any relevant documentation. We'll walk you through each part of the form, from Section A (Taxpayer Information) to Section B (Identity Theft Affidavit), ensuring you provide all necessary information for a successful submission.

Step	Action
1. Determine if you need to file Form 14039	You should file Form 14039 if you have been a victim of tax-related identity theft. This includes if you have received an IRS notice or letter stating that you filed a tax return using your Social Security number (SSN) when you did not, or if you have been notified that a tax return was filed in your name using your SSN without your knowledge or consent.
2. Gather your documentation	You will need to gather documentation to support your claim of identity theft. This may include copies of any IRS notices or letters you have received, copies of any documents that show your identity has been misused (such as credit card statements or bank statements), and a police report if you have filed one.
3. Complete Form 14039	You can complete Form 14039 online or by downloading the paper form and filling it out by hand. The form asks for information about your identity, the type of identity theft you have experienced, and the steps you have taken to protect yourself from future identity theft.
4. Sign and date the form	Once you have completed the form, you must sign and date it. You may also have to sign and date additional documents, such as a power of attorney if you are authorizing someone else to act on your behalf.
5. Submit the form	You can submit Form 14039 online, by mail, or by fax. If you are submitting the form by mail, you should send it to the IRS address that is listed on the form. If you are submitting the form by fax, you should fax it to the IRS number that is listed on the form.
6. Keep copies of all documents	You should keep copies of all documents that you submit to the IRS, including Form 14039 and any supporting documentation.

The sections in Form 14039 include:

Section	Heading	Description
A	Taxpayer Information	This section collects personal information about the taxpayer, such as their name, address, and Social Security number.
B	Type of Identity Theft	This section asks the taxpayer to identify the type of identity theft they have experienced, such as the fraudulent filing of a tax return, the unauthorized use of their Social Security number, or the opening of a fraudulent financial account in their name.
C	Description of Identity Theft	This section asks the taxpayer to provide a detailed description of the identity theft they have experienced, including the date, time, and location of the incident.
D	Actions Taken by Taxpayer to Resolve Identity Theft	This section asks the taxpayer to list the steps they have taken to resolve the identity theft, such as contacting the IRS, the Social Security Administration, and the financial institutions affected.
E	Documentation	This section asks the taxpayer to provide copies of any documentation related to the identity theft, such as police reports, letters from creditors, or bank statements.
F	Signature and Certification	This section requires the taxpayer to sign and date the affidavit and certify that the information provided is true and accurate.

The Importance of Submitting Form 14039 Promptly

Quick submission of Form 14039 is crucial in alerting the IRS to the identity theft. This prompt action enables the IRS to take immediate steps to secure your tax records, reducing the likelihood of further fraudulent activities. Delay in submission can lead to additional complications, including potential financial losses and extended resolution times.

E-filing vs. Mailing: Best Practices for Submitting Form 14039

Choosing between e-filing and mailing Form 14039 depends on your specific circumstances. If you're also submitting a tax return, attach Form 14039 and mail it. Otherwise, e-filing can offer a faster and more secure submission method.

After Submitting Form 14039: What Happens Next? Tax Tips

Upon receiving Form 14039, the IRS initiates an investigation into your case. This process may involve additional verification steps, securing your account, and possibly issuing an Identity Protection PIN (IP PIN) for future returns. Understanding the IRS's response process gives you a clearer picture of the resolution timeline and what to expect next.

Working with Tax Professionals: When to Seek Audit Expert Help

In complex identity theft cases, seeking help from a tax professional can be a game-changer. They can provide expert advice on navigating the IRS processes, ensuring proper submission of Form 14039, and handling any follow-up requirements.

Preventative Measures: Safeguarding Your Personal Information

Prevention is key in protecting yourself from tax-related identity theft. Measures include securing your SSN, regularly monitoring your credit reports, and being cautious with personal information, especially online. We'll offer practical tips on how to safeguard your sensitive data and reduce the risk of falling victim to identity theft.

Category	Preventative Measures
Password Security	Use strong, unique passwords for each account. Avoid using personal information. Change passwords regularly. Consider using a password manager.
Data Protection	Install and update antivirus and anti-malware software. Keep operating system and software up to date. Exercise caution with email links and attachments.
Online Transactions	Make transactions on secure websites (https). Avoid public Wi-Fi for sensitive transactions.
Tax Preparation	Use reputable tax preparers or software. Shred unnecessary tax documents. Securely store tax records.
Social Media	Limit sharing sensitive information on social media. Check and adjust privacy settings regularly.
Physical Documents	Keep important documents in a secure place. Consider safe deposit boxes or lockboxes. Shred unnecessary documents.
Phishing Scams	Be cautious of phishing emails and websites. Verify the legitimacy of requests for personal information.
Public Records	Be aware of public record information. Opt out of people search websites if desired.
Identity Theft Protection	Regularly monitor credit reports. Report suspected identity theft promptly.
Secure Disposal of Documents	Shred documents with sensitive information.
Regular Review of Accounts	Regularly review bank statements and credit card bills. Report any discrepancies immediately.
Secure Storage of Documents	Store important documents securely (e.g., fireproof safe, password-protected digital storage).
Awareness of Tax Scams	Be vigilant for common tax scams. Verify the authenticity of communication regarding taxes.
Taxpayer Education	Educate yourself on tax laws and filing requirements. Avoid mistakes that could lead to identity theft or other issues.

Resources and Support for Victims of Identity Theft: Privacy Act

In dealing with the aftermath of identity theft, victims have access to a wealth of resources for support and recovery. The IRS offers specialized assistance, including an Identity Protection PIN for safeguarding future tax filings. IdentityTheft.gov provides a comprehensive step-by-step recovery plan, while tax professionals can offer expert guidance in navigating complex cases. Additional support is available from non-profit organizations, and staying informed with IRS updates on tax scams is crucial for prevention. In severe cases, reporting the theft to law enforcement and regularly monitoring credit reports and financial statements is advisable to mitigate further risks and resolve issues efficiently.

Key Takeaways: Navigating Tax Identity Theft and IRS Form 14039

Understanding Form 14039 Identity Theft Affidavit: Essential for victims of tax-related identity theft to alert the IRS about their compromised identity.
How to File Form 14039: Submit this form promptly upon receiving a notice or letter from the IRS indicating a suspicious tax situation.
Responding to IRS Notifications: Act immediately if you receive a notice or letter from the IRS, especially if it relates to a tax year you haven't filed for yet.
Alerting the IRS: Use Form 14039 to inform the IRS that your identity has been stolen, crucial for protecting your federal tax records and identity.
Tax Year and IRS Communication: Be aware of the tax year mentioned in any IRS communication, as it might indicate fraudulent activity.
Electronic Filing Safeguards: Electronically file your tax return to ensure quicker processing and secure submission, especially relevant for tax year 2023 and beyond.
Dealing with Rejected Returns: If the IRS rejects your return because one was already filed using your SSN, submit Form 14039 immediately.
Tax Tips and Updates: Stay updated with IRS tax tips and be vigilant of common tax scams, especially those involving the internet and fraudulent tax filings.
Utilizing Resources: Leverage identitytheft.gov and FTC resources for a comprehensive recovery plan and step-by-step instructions on handling identity theft.
Handling Audits and Investigations: If you're subject to an audit or IRS investigation due to suspicious tax activity, follow their instructions meticulously.
Contacting the IRS: Utilize the IRS toll-free number for guidance, particularly if you have already filed a paper tax return or need to file one after noticing fraudulent activity.
Privacy Act Considerations: Be aware of your rights under the Privacy Act, especially when submitting personal and financial information to the IRS.
Preventing Future Incidents: Regularly monitor your financial statements and credit reports to help prevent future instances of identity theft and unauthorized use of your SSN.
Section B of Form 14039: Pay close attention to this section, as it requires detailed information about the tax-related identity theft incident.
Fax Number for Form 14039: Utilize the provided fax number for faster submission if you're unable to file Form 14039 electronically.
Dealing with Fraudulent Returns: Act quickly if you suspect fraudulent returns have been filed using your stolen social security information.
Handling IRS Correspondence: Thoroughly review any notice you received from the IRS related to suspicious or fraudulent tax activities.
Addressing Tax-Related Issues: Stay informed about potential tax-related issues that may arise from identity theft, especially in future returns.
Filing a Conservator's Report: In certain situations, a conservator may need to file Form 14039 on behalf of someone else, following specific IRS instructions.
Internet Connection Safety: Ensure a secure internet connection when filing your tax return online to protect your personal information.
Recovery Plan for Victims: Develop a recovery plan by following step-by-step guidelines available on resources like identitytheft.gov.
Avoiding Tax Scams: Educate yourself on common tax scams to help prevent falling victim to identity theft.
IRS May Require Additional Information: Be prepared to provide additional information if the IRS may request it during their investigation of your case.
Instructing Victims on Next Steps: The IRS or a tax professional can instruct victims on the necessary steps to take after their identity has been compromised.
Box 2 on Form 14039: Ensure accurate completion of Box 2, which pertains to the specific details of how your identity was compromised.

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