Think only individuals are targeted for identity theft? Think your business entity is safe from cybercriminals and IRS fraud?
Think again.
For years, identity thieves have used stolen employer identification numbers (EINs) to create fake Wage and Tax Statements (W2s) that they use to file fraudulent individual tax returns, as well as to open new credit cards. According to the IRS, thieves are now using company names and EINs to file fraudulent business tax returns.
The IRS has issued a warning to employers and small businesses to beware of growing attempts by cybercriminals to target businesses. These criminals steal the business’s information and then use it to open new lines of credit, or obtain credit card accounts, and file fraudulent tax returns for bogus refunds.
In the past two years, the IRS has noticed an increase in fraudulent filings for partnerships as well as trust and estates. Even Schedules K-1 are being fraudulently filed by cybercriminals.
Remember the best defense against fraud is you! Businesses, partnerships, and trust and estate filers should be aware of these red flags indicating their identity has been stolen:
- The taxpayer unexpectedly receives a tax transcript or IRS notice that does not correspond to what the taxpayer submitted.
- The IRS rejects an extension to file because a return with that EIN or Social Security number is already on file.
- An e-filed return is rejected because there is a return with a duplicate EIN/SSN already on file.
- The taxpayer fails to receive expected correspondence from the IRS because the identity thief has changed the taxpayer’s address on file with the IRS.
