Scammers sometimes use stolen Social Security numbers to file fraudulent tax returns and collect refunds. To prevent this, the IRS scans every tax return for signs of fraud. If the system finds a suspicious tax return, the IRS reviews the return and sends a letter to the taxpayer letting them know about the potential ID theft. The IRS won’t process the suspicious tax return until the taxpayer responds to the letter.
The IRS may send these identify fraud letters to taxpayers:
Taxpayers should follow the steps in the letter
The identity theft letter will tell the taxpayer the steps they need to take. Taxpayers should follow those steps to resolve the matter with the IRS.
Victims of identity theft can find more resources on reporting and recovering from ID theft with the Federal Trade Commission: identitytheft.gov.
If the taxpayer received an IRS identity theft letter, they don’t need to file an identity theft affidavit
If taxpayers need to give the IRS a heads up that they’re a victim of identity theft or that they think they may be a victim, they can file Form 14039, Identity Theft Affidavit. If a taxpayer has already received an IRS letter about identity theft, they don’t need to file an affidavit.
More information:
Identity Theft Central
How IRS ID Theft Victim Assistance works