Yes, the IRS does ask taxpayers to verify their identity, usually through a formal letter (such as 5071C or 5747C) if they suspect a fraudulent tax return was filed using your information. This process protects you from identity theft and ensures your tax return is processed, which may involve using the IRS Identity Verification Service website or calling the number on the letter.
If the IRS suspects your tax return is fraudulent, you might receive a 5071C Letter asking you to verify your identity. You can verify your identity online through the IRS Identity Verification Service website or by phone using the number provided in the 5071C Letter.
Your refund
It may take up to 9 weeks to process your return after you verify it.
Overview. Letters 5071C, Potential Identity Theft During Original Processing with Online Option, is mailed to taxpayers to notify them that the IRS received an income tax return using your name, Social Security number (SSN) or individual taxpayer identification number (ITIN).
One-time forgiveness, officially known as First-Time Penalty Abatement (FTA), is an IRS program that allows qualified taxpayers to have certain penalties removed from their tax accounts.
Should your account be selected for audit, we will notify you by mail. We won't initiate an audit by telephone. Assistance is available to help you understand the letter/notice received: Understanding your IRS notice or letter.
The IRS asks you to verify your identity primarily to stop fraud, often because someone filed a tax return using your Social Security Number (SSN) without your permission, or due to data discrepancies, a new address, or a previous data breach involving your info. Verification ensures you are the legitimate taxpayer before they process your return, issue refunds, or grant access to your online account, protecting you from identity theft.
The IRS may send these identify fraud letters to taxpayers:
Letter 5071C, Potential Identity Theft with Online Option: This tells the taxpayer to use an online tool to verify their identity and tax return information. If the taxpayer didn't file, they can let the IRS know with the online tool.
Be ready to verify your identity when calling the IRS
The IRS $600 rule refers to a change in reporting requirements for third-party payment apps (like Venmo, PayPal) for taxable income from goods and services, where platforms must send a Form 1099-K if you receive over $600 in a year, intended to capture gig economy/side hustle income, though delays and phased implementation have adjusted the timeline, with current rules for 2024 using a higher threshold ($5,000) before fully phasing to $600 for future years, but remember all taxable income, regardless of form, must always be reported.
Common IRS audit triggers
We sent you a CP5071 series notice because we need you to verify your identity and the return: If you didn't file a return: Verify with us. You may be the victim of identity theft. If you did file a return: Verify so we can continue processing your return.
Code 570 generally means that the IRS has placed a temporary hold on your return due to additional verification or a discrepancy. Code 971 often refers to a notice being issued regarding that review.
It's about protecting you from scammers who may try to set up an account in your name to access your information and benefits. After you verify your identity, you won't have to do it again for that account unless you lose access to your account's multifactor authentication method or need to recreate your account.
We won't be able to process your tax return, issue a refund, or credit any overpayments to your account. Note: The letter applies to identity and tax return verification ONLY. No other tax-related information, including refund status, is available at the telephone numbers shown on your letter.
First things first, an IRS Letter 5071C is not an audit. Whew, you can take a deep breath! At this point, the IRS is not auditing your tax return. In fact, they have not even begun to review it yet!
Taxpayers whose tax returns have been flagged for possible identity theft should receive one of the following letters: Letter 5071C, Potential Identity Theft during Original Processing with Online Option – Provides online and phone options and is issued most widely.
The identity verification process from the IRS can be triggered on a random basis, or it could be due to suspicion that a tax return with your name on it is potentially the result of identity theft.
Self–Service: The fastest method to verify; usually takes 5-10 minutes. For step-by-step instructions, visit Verifying your identity with ID.me Self-Service. Video call: You will upload your document, then join a quick video call.
Bring the following identity verification documents to your appointment: A valid U.S. federal or state government-issued picture identification, such as a driver's license, state ID, or passport.
You know the IRS might be investigating you through official mail (first contact), phone calls (often with automated messages to IRS.gov), or in-person visits, but signs of a criminal probe include contact with IRS Criminal Investigation (CI) agents, subpoenas to you or your bank, questions to your accountant/bank, unusual account activity (freezing/refusing transactions), or agents suddenly going silent after an audit. Key indicators are official IRS letters, contact from CI special agents, third-party inquiries, and formal summonses for records, signaling serious scrutiny beyond a simple audit.
Filers most commonly receive letters from the IRS notifying them of the examination in the fall or winter months of the previous tax filing year. Yet, the auditors can mail the notifications throughout the year.
Not reporting all of your income is an easy-to-avoid red flag that can lead to an audit. Taking excessive business tax deductions and mixing business and personal expenses can lead to an audit. The IRS mostly audits tax returns of those earning more than $200,000 and corporations with more than $10 million in assets.