Written by: Carolyn Richardson, EA
Most clients find out they have been the victim of return identity theft when they receive a notice from the IRS or a charge from a credit card company, but in a recent case one client found out he’d been the victim of identity theft when he got a check – a check that was supposed to go to the ID thief.
Our member filed his return for 2012 in a timely manner and asked that the IRS debit his bank account for balance due. A few weeks later, he received a check in the mail for about $7,500 from TurboTax’s third party processor with the explanation that they could not deposit it directly to his account as asked. The member had never heard of the processor and thought the check was some sort of scam so he just held on to it. In September he realized the IRS had never removed his balance due from his account, so he called TurboTax for an explanation. That’s when he found out that the return transmitted by TurboTax to the IRS wasn’t the one he had prepared and thought he’d filed. Fortunately, he had audit defense so he called us to ask what he should do now that his own return was officially late.
The IRS instructed us to have the member return the check back to TurboTax and have TurboTax write a new check to the IRS noting the taxpayers name, SSN and tax year on it, and to mail in a filed return with the payment due. The member mailed us a signed return with a check for the correct balance due, and we mailed it in with a letter explaining what had happened, along with a copy of the check from TurboTax. We requested that the IRS flag the taxpayer’s account for ID theft, process the mailed return and payment, and apply the TurboTax check back to the taxpayer’s account to wipe out the refund.
From there, things went downhill. The IRS received both checks and the tax return, and the checks were cashed. But they did not apply the TurboTax return to the taxpayer’s account, despite the fact that the name and SSN were on the check memo. The IRS reversed the fraudulent taxes and withholding and assessed the correct taxes and withholding and payments, which left the taxpayer’s account with a balance due in the amount of the ID thief’s refund amount.
In February, the IRS started issuing erroneous refund notices to the taxpayer, demanding repayment, which we replied to twice showing that the TurboTax check had cleared the Fresno service center the previous October. Calls to the practitioner priority line were fruitless, as they said that the ID theft unit had the case and would eventually get the payments sorted out. In the meantime, the member also started receiving scam phone calls from someone pretending to be the IRS, which we told him to ignore. When the IRS issued a notice of intent to levy – despite our being told just three weeks previously that the account was frozen – we called again. This time practitioner priority was able to see that the check was in a temporary account for some reason, and they referred us over to the ID theft unit directly. The ID theft unit couldn’t see the temporary account, but agreed to put a “hard trace” on the TurboTax check to find the payment.
Approximately a month later, practitioner priority confirmed that they had found the check and applied it to the taxpayer’s account. There was still a small balance due because of processing fees TurboTax had not returned to the IRS, but the taxpayer paid those immediately and TurboTax refunded that amount to him. It only took a year plus one month to clear up the problem, caused by the taxpayer being honest and wanting to return the fraudulent check to the IRS. Thus proving that no good deed goes unpunished.
TaxAudit.com gets dozens of comments from customers we have helped every week. Below are just some of the reviews we received last month.
As painful and soul searching as it is when you receive an audit notification, the audit itself went smoothly with the help of TaxAudit.com.Alicia, Santa Ana, CA
Excellent and well worth the annual fee from Turbo Tax. Managed the process, kept us on track and provided helpful advice. We had never experience an audit and were very nervous but our audit representative took away all the stress and fear.Jay, Manhattan Beach, CA
I am so glad that I decided to purchase TaxAudit protection when I filed my return. Even though I had never been audited, and was sure there was no reason I would be – sure enough it happened. The service and support from TaxAudit was excellent. One of the best decisions I ever made. Thanks!Clinton, Cary, NC
I must admit when contacted by the IRS I was a little nervous, but when I contacted Tax Audit I immediately felt I could relax. My coordinator and representative made it very easy by thoroughly explaining each step I must do. I’m not a real wizard on the computer but my audit representative was so patient with me, and put me at ease with her kindness and keeping me informed of each step that was coming. On the first submission the IRS came back with me owing around $1,100 and I was all set to send in a check but my audit representative said that wasn’t acceptable. She gave me a couple of suggestions and resubmitted the claim to which a no change to the original tax return came through, which saved me that $1,100 dollars.Janet, Kalamazoo, MI
I received IRS notice stating I need to pay $9000 regarding retirement income reported in K1 and few other misc items. I was scared and without tax audit’s help I’d have just paid that amount. With timely, courteous, and professional help and knowing they are there to support I got that erased and instead filed an amendment resulting in $7887 refund to me. I can’t imaging filing my taxes without purchasing TaxAudit in future.Neha, Fremont, CA
My audit representative was extremely helpful and responsive throughout the process. My experience was very favorable, and I intend to share this with others and include Tax Audit support on future returns.Kevin, Mulberry, FL
My 2010 taxes were audited by the IRS, who claimed my monthly retirement checks was income from being self-employed. It took me 18 months to resolve the issue alone, and without a clear-cut disposition. Then in September 2014, the same issue arose again on my 2012 tax return. This time I called on the experts at TaxAudit.com for help, who acted on my behalf without me dealing face-to-face with the IRS. In early December I received a written notice from the IRS stating,”… the information you provided resolved the tax issue in question and that our inquiry is now CLOSED (emphasis added by me). Amount due: $0.00.” I am grateful to the TaxAudit.com team for the efficient and professional manner in which they removed the tremendous potentially financial and emotional burden that my wife and I were carrying. Thanks, team!Lawrence, Reedville, VA
No one likes an audit, but I really felt my needs were well taken care of. My audit representative did a great job of guiding me through step by step. I was informed throughout the whole process, and was very satisfied with the services provided.David, Grand Junction, CO
Not only did my audit representative help us resolve with a favorable finding, he was able to reduce our monetary load by convincing the agent to eliminate penalties. And he made suggestion for future accounting and filing procedures to reduce potential issues.Gene, Custer, SD
This has been a great experience. Their professionalism and competence made this experience extremely easy to handle. My most sincere thanks to them and to TaxAudit, I will continue to sign-up for your audit protection on all my future filings!Daniel, Southern Pines, NC