Tax verification is a routine procedure used by the IRS and state tax agencies to prevent fraud and ensure accuracy. It is often triggered by suspicious activity, inaccuracies in a filed return, or random selection.
The IRS receives copies of your W-2s and 1099s, and their systems automatically compare this data to the amounts you report on your tax return. A discrepancy, such as a 1099 that isn't reported on your return, could trigger further review. So, if you receive a 1099 that isn't yours, or isn't correct, don't ignore it.
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.
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The IRS scrutinizes tax returns to look for signs of fraudulent activity. One of the most common tax scams is another individual using your name and Social Security number to file a fraudulent tax return. If you were a potential victim of tax fraud, you may receive an ID verification letter.
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).
Your refund
It may take up to 9 weeks to process your return after you verify it.
Be ready to verify your identity when calling the IRS
Taxpayers whose tax returns have been flagged for possible IDT 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.
And annoyingly, there's no way of finding out the reason for the delay until the IRS is ready to tell you. However, there is also no need to worry. Oftentimes the delay is simply resolved and your refund is processed as expected – albeit later than you'd hoped.
Verification activities take place throughout the SLC and consist of specific checks of individual components or documents. Audit activities take place throughout the SLC and confirm that functional safety procedures are being applied.
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.
Failing to report all taxable income
If you receive a 1099 showing income that isn't yours or listing incorrect income, get the issuer to file a correct form with the IRS. Report all income sources on your 1040 return, whether or not you receive a form such as a 1099.
The IRS is considering changing an amount on your tax return, due to an examination after it processed your tax return. This is called an audit. If it audits your return, the IRS will notify you by mail, and the notice will tell you if the audit will be handled by mail or in person.
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.
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.
Once we verify your identity and confirm you submitted the tax return, we'll continue processing your return. It may take up to 9 weeks to process.
What causes an IRS refund delay?
Request an expedited refund by calling the IRS at 800-829-1040 (TTY/TDD 800-829-4059). Request a manual refund expedited to you.
The IRS issues several types of identity verification letters. Letter 4883C often involves a phone call or an in-person visit to confirm details. Letter 5071C, on the other hand, sometimes allows online verification through the IRS website if you meet certain requirements.
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.