25.23.13. Income Related Identity Theft

(1) Employees in the Identity Theft Victim Assistance (IDTVA) organization process Income Related Identity Theft (IDT) claims and respond to IDT victims.

(1) Refer to IRM 1.2.1.13, Servicewide Policies and Authorities, Policy Statements for Customer Account Services Activities, for information.

(2) The Taxpayer Advocate Service is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate, that helps taxpayers and protects taxpayer rights. TAS offers free help to taxpayers when a tax problem is causing a financial difficulty, when they’ve tried and been unable to resolve their issue with the IRS, or when they believe an IRS system, process, or procedure just isn't working as it should. TAS strives to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico.

(3) The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights.

(4) Policy Statement 10-1, Assisting Taxpayers who Report they are Victims of Identity Theft. See IRM 1.2.1.17, Servicewide Policies and Authorities, Policy Statements for Security, Privacy and Assurance Activities.

(1) The Taxpayer Services Commissioner has overall responsibility for the policy related to this IRM which is published on a yearly basis.

(2) Additional information is found in IRM 1.1.13.7.3, Accounts Management, and IRM 21.1.1, Accounts Management and Compliance Services Overview.

(1) For a comprehensive listing of any IRS acronyms, please refer to the Acronym Database. The following acronyms will be used throughout this IRM:

(1) Refer to IRM 1.4.2.1.8, Related Resources, for information on related resources that impact internal controls. The following resources contain information and job aides that can assist in case processing:

• Document 6209, IRS Processing Codes and Information

• Accounts Management Research Portal - Identity Theft

• SERP

• IDTVA Hub

(2) The following systemic tools may be utilized to perform research or to process the work performed by IDTVA. This list is not all inclusive:

• Account Management Services (AMS)

• Accurint

• ACSweb

• Automated Substitute for Return (ASFR) System

• Automated Underreporter (AUR) System

• Integrated Automation Technologies (IAT)

• Integrated Data Retrieval System (IDRS)

• Correspondence Examination Automation Support (CEAS)

• Correspondence Imaging Inventory (CII)

• Report Generation Software (RGS)

• Treasury Check Information System (TCIS)

(3) In addition to the IRM 25.23, the following IRMs may be utilized for processing work. This list is not all inclusive:

• IRM 1.2.1.2.36, Policy Statement 1-236 (Rev 1), Fairness and Integrity in Enforcement Selection

• IRM 2.3, IDRS Terminal Responses

• IRM 2.4, IDRS Terminal Input

• IRM 3, Submission Processing

• IRM 4, Examination Process

• IRM 5, Collecting Process

• IRM 20.1, Penalty Handbook

• IRM 21, Customer Account Services

• IRM 25, Special Topics

• IRM 25.23.1, Identity Protection and Victim Assistance - Policy Guidance

• IRM 25.23.2, Identity Protection and Victim Assistance - General Case Processing

• IRM 25.23.3, IMF Non-Tax-Related IDT and Specialized Programs

• IRM 25.23.4, IDTVA Paper Process

• IRM 25.23.9, Business Master File (BMF) Identity Theft Processing

• IRM 25.23.10, Compliance Identity Theft Case Processing

• IRM 25.23.11, Business Master File (BMF) Identity Theft Procedures for Accounts Management

• IRM 25.23.12, IMF Identity Theft Toll-Free Guidance

• IRM 25.24.1, Return Preparer Misconduct Victim Assistance - General Overview

• IRM 25.24.2, Return Preparer Misconduct Victim Assistance Specialized Accounts Management Processing

(1) It is necessary to research and consider all information available when reviewing accounts potentially impacted by income related IDT. Incomplete research can result in the taxpayer continuing to be negatively impacted by IDT or the incorrect removal of income.

(2) Prior to making a determination, consider the following while you conduct research:

• For the year in question, was the occupation consistent with the taxpayer’s age (e.g., a minor child working as a truck driver)?

• Do all income documents available on CC IRPTR have the taxpayer’s correct name (e.g., spelling, last name, or entirely different name)?

• Do any income documents available on CC IRPTR reflect an address for the taxpayer that does not match the valid taxpayer’s current address or address history (e.g., different street address in the same city or different cities/states)?

• Is the income reported on CC IRPTR consistent with the taxpayer’s employment history (e.g., same employer, history of only retirement income, etc.)?

• Is the location of the employer consistent with the taxpayer’s employment history?

• Is the IRPTR income document flagged as an INVALID or TIN Perfected?

(3) Refer to the table below for common scenarios to help you determine if the income related IDT issue will be resolved as tax related IDT or non-tax-related IDT.

(4) All income related IDT cases will be controlled on IDRS to the affected tax period. Ensure all CII case data is correct, including updating the category code, MFT, and tax year on the CII case. See IRM 25.23.4.3.1, CII and IDRS Case Controls, for additional guidance.

(5) When a Form 14039 Identity Theft Affidavit, police report, or correspondence is received, complete all required research, and use the table below to determine if the taxpayer is a victim of income related IDT.

(6) Employees trained to work IDTVA Specialty cases, refer to the appropriate functional guidelines in IRM 25.23.10, Compliance Identity Theft Case Processing, for additional instructions.

(7) If the income related IDT issue is IRS identified, and there is clear and convincing evidence to support making a determination, take the following actions:

(1) When a social security number is used by someone other than the SSN owner for employment purposes, SSA must be notified to correct the earnings record for that SSN.

(2) While reviewing an IDT claim, verify the IRP data. When income is incorrectly reported under an SSN, Form 9409, IRS/SSA Wage Worksheet, must be completed and sent to the SSA.

(3) Complete Form 9409 only for wage income containing Social Security Wages. Do not complete Form 9409 when:

• The SSN has been TIN perfected. (These will be rejected by SSA.)

• CC IRPTR indicates the income is invalid.

• The income is reported under an ITIN (that begins with "9").

• The employer indicates that the information has been corrected with SSA (Form W-2C, Statement of Corrected Income and Tax Amounts).

• The taxpayer has provided an SSA determination letter.

• IRPTR data is no longer available.

• A Form 9409 was previously completed for the income in question.

• Wages are reported beyond one year of the Date of Death (DoD).

  Note: Wages reported prior to the DoD must still be addressed even if the ID theft is identified after the taxpayer’s DoD.

Caution: When completing Form 9409, input the amount as a whole dollar figure. If necessary, round the income to the nearest whole dollar amount (i.e., $54,661.82 would be entered as $54,662.00). Make sure the form is complete (with special attention to Section B) indicating why the form is being sent to the SSA. This will prevent the form from being rejected and causing additional delays to our customers.

(4) If you have determined the valid taxpayer earned only a portion of the income on the wage document shown on CC IRPTR, and the amount reported is due to an act of fraud or IDT, complete Form 9409. In Section B, select Box 6, and input the amount the taxpayer reported for the wage amount.

(5) If allowing the wages on the ITIN holders return, prepare Form 9409, IRS/SSA Wage Worksheet, (for the SSN) to remove the information from the true SSN owner’s account.

(6) Prepare a Form 3210, Document Transmittal, and include the following information:

• Sender’s full name, SEID, Stop Number, Mailing Address, Fax/EE-Fax Number and Phone Number.

• Individually list each taxpayer’s last four digits of their SSN, their name control, and the CII case ID.

• Include a count of how many Forms 9409 are being sent for each SSN listed.

• Tax period(s) of the Forms 9409.

• In the remarks area include the total number of Forms 9409 that are being sent.

(7) If after 60 days the Social Security Administration has not acknowledged receipt of the Forms 9409 by returning a copy of the Form 3210, resubmit them. Document AMS with the re-submission of the Forms 9409.

(8) If the Forms 9409 and Form 3210 were resubmitted and the Social Security Administration has not acknowledged receipt, document the Form 3210 with" No Response from SSA" (or similar). Do not submit the same documents more than two times.

(9) If a Form 9409 was prepared and submitted to the SSA in error, take the following actions:

• Fill in the taxpayer’s identifying information (SSN, Name, Address, etc.).

• Complete Section A, with the same amounts used on the erroneously prepared Form 9409.

• Check the corrected box in the upper right-hand portion of the form.

  Note: Do not check any of the boxes in section B.

• Complete the bottom portion of the form and submit the form as outlined in paragraphs (6) and (7).

• Document CII and/or AMS to show that a corrected Form 9409 was mailed to SSA and which income documents were revised.