IRS has clarified several procedures that apply when there is identity theft, including when taxpayers should and should not file Form 14039, Identity Theft Affidavit.
Circumstances under which taxpayers should file Form 14039 with IRS. The Form 14039 affidavit should be filed if the taxpayer attempts to file an electronic tax return and IRS rejects it because a return bearing the taxpayer’s Social Security number already has been filed. Or, it should be filed if IRS instructs the taxpayer to do so.
Completing Form 14309, attaching it to a paper tax return and mailing it to IRS is the way to inform IRS that the taxpayer may be a victim. IRS will then identify the fraudulent return and, after an investigation, clear the account and process the paper tax return.
A fillable Form 14039 is available on IRS.gov. It can be completed online, printed and attached to a paper tax return for mailing to IRS. Or, taxpayers may complete the form online at the Federal Trade Commission, and the Federal Trade Commission will electronically transfer the Form 14039—but not the tax return—to IRS.
But, often Form 14309 need not be filed.IRS says that, in the vast majority of tax-related identity theft cases, i.e., where IRS discovers what might be identity theft, there is no need to file the Form 14039 affidavit.
IRS often identifies a suspicious tax return based on hundreds of processing filters and pulls the suspicious return for review. IRS will send a letter to the taxpayer and will not process the tax return until hearing back from the taxpayer.
In this situation, the taxpayer will receive Letter 5071C, which will ask him to use an online tool to verify his identity and tell IRS if he filed the return in question. A variation, Letter 4883C, will ask the taxpayer to call IRS to verify his identity and tell IRS if he filed the return. Those who have been a victim of a data breach may receive Letter 5747C and be asked to verify their identity in person at a Taxpayer Assistance Center.
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